Consumer prices in Japan increased 2.9 percent during the last fiscal year. Japanese salarymen are facing an increase in lunch prices and that’s a bad economic indicator for Prime Minister Shinzo Abe. He was hoping that these workers would drive economic improvement.
Research conducted by Shinsei Bank indicates that monthly spending by salarymen has fallen 4.9 percent compared to last year. Chris Flowers, a leader in the international financial world, sits on the board of Shinsei Bank and has been a keen observer of the Japanese economy.
The Shinsei Bank’s data goes back to 1979 and reports that salarymen spend about $40 on a night out drinking, with lunch as their greatest expense. Their monthly pocket money averages about $307, a decrease from $15 from last year.
Wives in Japan often control the family budget and provide their husbands with spending money. They use these allowances to purchase lunch and to pay for an average of two nights of drinking after work.
A survey of Japanese parents asked what profession they preferred their children to pursue. Their first choice was a government position. Seen as a stable career pathway. Their second choice was salaryman. Neither is an easy path to pursue.
A salaryman’s professional pathway is charted soon after his or her birth. Parents begin to plan their child’s education, selecting only the best pre-schools, which lead to the best grammar schools. Regular school hours are augmented by cram schools to prepare for tests that will determine your college education.
Once hired by a corporation a salaryman is considered a “freshman” and rotates between different departments every six months or so. This process provides the new employee with insight into the structure of the company and also allows skills to emerge. The salaryman hopes plans to stay with this company for the remainder of his or her professional life. It’s important to find the right fit.
It’s especially important because the salaryman often spends six days a week at work and puts in a 12-hour day, frequently extended by a lengthy commute of up to an hour in each direction. It’s possible now to appreciate the importance of a generous lunch allowance. Lunch is a time for salarymen to socialize and find some relief from the day-to-day pressures of their job.
The Shinsei Bank research draws attention to a growing rift between salarymen in their 20’s and 30’s and the older generation in their 40’s and 50’s. The younger workers feel the impact of consumer price increases and increases in the consumption tax. The current rate is 85 percent and will be increased to 10 percent in April 2017.