Archive for September, 2011

Eat a potato chip and send a kid to college

Wednesday, September 28th, 2011

They care

Besides manufacturing stuff, what do condiment maker Kagome, snacks producer Calbee and pharmaceutical company Rohto have in common? Not much, but in any case the three firms have joined forces to establish a foundation called Michinoku Mirai (Northern Region Future) to provide funds for young people who were orphaned by the March 11 earthquake and tsunami to pay for university or post-secondary vocational school. According to the Health Welfare and Labor Ministry, about 1,500 youngsters aged 18 or less lost both parents in the disaster, and starting in March 2012, those who graduate from high school and wish to continue their education can apply for up to ¥3 million a year from the fund to pay for anything related to that education, including entry fees, tuition and supplies.

The three companies estimate that the fund will need about ¥200 million a year, and each one will start by contributing ¥30 million for the first year, with the remainder coming from solicited contributions. They will continue supplying the fund with money for 20 years, at which point children who were orphaned as infants by the disaster will have graduated from high school. The reason the fund was created is that there is no public support in Japan for the continuing education of orphans. When orphans reach the age of 18, they are on their own. Foster care ends at 18, and since in Japan there is very little in the way of what in the West are called scholarships — meaning education grants — orphans almost never attend university. The exception is the long-standing, specialized private foundation Ashinaga Ikueikai, which provides educational support to orphans all their lives, from elementary to graduate school.

Will K-cars save the domestic automotive industry?

Monday, September 26th, 2011

Mira, Mira in the lot...

Two weeks ago, on the same day that it didn’t cover the huge anti-nuclear power demonstration in Tokyo, NHK’s 7 o’clock news bulletin had a feature about Daihatsu’s new small car, the Mira e:s (pronounced “ease”). Initially, we saw the report as further proof of the public broadcaster’s retreat from its traditional aversion to anything smacking of commercial promotion; but in the days since then we’ve come to realize that the announcement was newsworthy as more than just a financial story.

The e:s is the latest model in the Mira K-car series. K-car, as in kei (light), are automobiles made specifically for the Japanese market. The name refers to the engine displacement, which is only 660 cubic centimeters. Consequently, the weight and size are smaller than standard automobiles, which is why many people believe them to be unsafe. Because K-cars are very small and have to be lightweight, they tend to crumple easily in accidents. But they are also low-priced and get high gasoline mileage. What makes the e:s noteworthy is its even lower price–¥795,000–and even higher gas mileage–30 kilometers per liter based on JCO8 mode testing methodology. That’s almost a 40 percent improvement in mileage over previous Mira models owing to e:s’s lighter body structure and smoother transmission function. As a result, Daihatsu is marketing it as the “third eco car” after the all-electric vehicle and the hybrid. For comparison, Toyota’s best-selling Prius hybrid gets 32. 6 km/l and Honda’s Fit hybrid 26km/l.

Daihatsu hopes to sell 10,000 e:s per month, which seems quite feasible since Daihatsu is already the number one maker of K-cars in Japan (but not K-trucks). The company unloaded 341,000 during the first eight months of the year, though one of the main reasons for the robust sales was the March 11 disaster. K-cars are particularly popular in rural areas, where automobiles are a necessity and many families own more than two. Because people use them every day and for every sort of task, economy is the main consideration. Not only do they use less fuel, but the excise/weight taxes and insurance are much cheaper (though they are subject to a special Light Motor Vehicle Tax), maintenance costs are lower and owners in rural areas usually aren’t required to offer proof of a parking space for K-cars at the time of registration. According to the Japan Mini Vehicles Association, 43 percent of the automobiles registered in the Tohoku region before the March 11 disaster were K-cars. In the prefectures that align along the Japan Sea, the portion of K-cars often tops 50 percent, and in Okinawa it’s 53 percent. Many automobiles were destroyed in the earthquake and tsunami, and the demand for used cars, used K-cars in particular, soared as a result. A friend of ours who lives in Osaka just sold her 10-year-old K-car to a broker for ¥50,000. Usually with a car that old the owner has to pay the broker to haul it away.

In fact, K-cars have kept Japan’s domestic automotive industry stable in the past year. After the end of the government’s eco point system, sales of regular cars dropped, but K-car sales have been steady all along. And since they use less parts they were less adversely affected by the supply shortage caused by the March 11 disaster. Even Toyota is coming out with a K-car. Japan’s number one automaker never entered the field mainly because it has a 51 percent controlling interest in Daihatsu. But the market is too good to pass up right now, and the future holds at least some promise. Women are more likely to buy K-cars, and unlike the current demographic of over-70 women, who don’t drive at all, boomer women all drive and will likely continue to do so well into old age. The sunnier outlook for Daihatsu is exemplified by the company’s ad campaign for e:s, which features Bruce Willis making fun of himself as a celebrity shill. Only a company with supreme confidence would dare draw attention to how they draw attention.

In Japan, you get the education you (the consumer) pay for

Thursday, September 22nd, 2011

All in the family: National cram school Kawai Juku joins forces with local cram school Tokyo Shingaku Seminar for some educational synergy

Last week, the Organization for Economic Cooperation released a list that ranked the 31 member countries with “comparable data” in terms of public spending on education as a percentage of gross domestic product. Japan came in last at 3.3 percent. The average percentage was 5.0, with Norway at number one with 7.3 percent. However, in terms of private spending as a proportion of all expenditures on education, Japan came in third out of 28 OECD member countries with comparable data, at 33.6 percent. Only South Korea and Chile were higher.

These findings were based on data from 2008, which means they don’t take into consideration recent changes implemented by the Democratic Party of Japan. The most relevant change in this regard is the government’s decision to waive tuition for high school students by paying subsidies to local governments. High school is not mandatory in Japan, and even public high schools require fees of some sort. These subsidies will probably change the OECD’s rankings when it compiles a list for public spending in 2011, but it may not have any effect on the list for private spending. One of the reasons the DPJ pushed the tuition-free policy is because the party recognizes that in the current job climate even entry-level, minimum-wage service employment requires a high school diploma. The days when junior high school graduates were solicited for factory jobs and other blue collar work is long gone. But compared to many of the other costs that parents pay to have their children educated, public high school tuition is almost like a drop in the bucket. According to education ministry figures for 2006, the average public high school student paid ¥112,000 a year in tuition, which is certainly high for lower income families; but at the same time, the average public high school student also paid ¥176,000 a year for outside cram schools, or juku. Altogether, parents paid on average ¥520,000 a year in education costs for a child if he or she went to public high school, which is about half the cost for private high school students, who paid on average ¥1,045,000 a year (including ¥785,000 tuition and ¥260,00 for juku). Continue reading about spending of private education →

Heal me: Spirituality businesses redefining “religion”

Thursday, September 15th, 2011

Notes from the other side: Newspaper ad for books on spirituality

Earlier this week, Toru Saito, the leader of a yugen-gaisha (limited company) called Shinsekai (World of Gods), was arrested by the Kanagawa Prefectural Police for swindling five customers out of more than ¥13 million. Shinsekai is a so-called spirituality business (reikan shoho) that runs a chain of “salons” where people who are suffering physically or mentally can be “healed,” mainly through prayer fees or the purchase of spiritually charged objects like “power stones.” A group of lawyers representing former patrons of Shinsekai have likened the company’s business model to that of a pyramid scheme. People who come in for a consultation are charged huge sums in an ongoing manner to be cured, and when they can’t pay they are then compelled to bring in friends and acquaintances, thus creating a cycle. The salons themselves grow from this cycle and, according to the lawyers group, have to fulfill quotas assigned by Shinsekai executives. A local newspaper reports that the company, which some media are calling a “cult,” collected ¥17.5 billion from 2001 to 2007. Between 30 and 50 percent of the money went to the leadership group, with Saito, the founder, receiving a cool ¥1.5 billion.

Nice work if you can get it, and a lot of people obviously are trying. Since the Aum Shinrikyo scandal in the mid-90s, the idea of religion has been tainted in Japan, and a lot of money-making spiritual concerns that once would use the word religion if for no other reason than to qualify for tax-exampt status now shun it, prefering the term “healing” to describe the benefits of what they have to offer. Superstar fortune tellers and “aura readers” like Hiroyuki Ehara and Kazuko Hosoki epitomize this post-Aum spirituality trend, which focuses on the subject’s relationship with his or her ancestors, thus tapping into cultural beliefs associated with tenets of Buddhism and Shintoism. These two faith systems, especially Shintoism, have a close relationship with money, which represents the spiritual investment in whatever sort of outcome the subject wants to bring about. If you want a prayer to bless your house or make sure your son passes a university test, the more you pay the stronger the entreaty, though in the Western sense of “faith” it sounds more like superstition.

Continue reading about the spirituality business →

Local governments crack down on health insurance scofflaws

Sunday, September 11th, 2011

Enough to make you sick: monthly Kokuho payment schedule

According to an article in the Aug. 29 Asahi Shimbun, the number of asset seizures initiated by local governments in an attempt to recoup delinquent national health insurance payments has increased startlingly in the past four years. Asahi asked the pertinent sections of all 23 wards in Tokyo, as well as those in 19 major cities about seizures. They received responses from 37 local governments in all, and the data indicates that between fiscal 2006 and fiscal 2010, the number of delinquent payments that led to actual seizures of assets increased by almost sixfold.

In this case, we’re talking about Kokumin Kenko Hoken, or National Health Insurance, which is paid by anyone who is not a member of the Shakai Kenko Hoken system, which is paid for by contributions from employers. Traditionally, National Health Insurance, known as Kokuho for short, was carried by people who are self-employed. And that’s still true. However, the ranks of Kokuho carriers has increased greatly over the past two decades as the employment situation has changed. With more people out of work and even more changing over from so-called lifetime employment to so-called non-regular employment, the number of people who are compelled to pay into the Kokuho system gets larger and larger. Kokuho is administered by local governments, and national insurance, whether paid for by the individual or by his/her employer, is mandatory in Japan. If the individual is too poor to pay the premiums, he or she should go to the local government office and tell an official. The only real way to get out of the system and still have insurance is to qualify for welfare. Other than that, in principle everyone has to pay. Some local governments have a system wherein someone who has not paid because of financial difficulties but needs medical care can pay the full amount of that care up front and receive at least partial reimbursement later, but those are exceptional cases.

Continue reading about health-insurance crackdowns →

Grandma got game: More elderly patronizing arcades

Wednesday, September 7th, 2011

Not-so-heavy medals

A recently released report by the Japan Productivity Center noted a steady decrease in leisure expenditures. In 2010, the Japanese public spent ¥67.97 trillion on recreation, a 2.1 percent decrease from the previous year and the second year in a row that statistic registered a deficit. Certain activities, however, have posted increases. Driving and eating out remain the most popular things people spend money on during their free time. They also spent about 1 percent more on theatrical films, tourism and amusement parks in 2010; and expenditures for activities “promoted on television” saw a 6.2 percent increase. The pastimes that contributed to the minus figure were mainly sports (except for bicycling and running) and goraku (distractions), a euphemism for what are generally considered non-constructive pleasures, such as gambling, pachinko and computer or arcade games.

Spending on goraku, in fact, was down by a whopping 4.7 percent, a reality that has prodded the arcade industry, both operators and game producers, to concentrate promotion on a demographic that they previously ignored: the elderly. As reported in this space last year, pachinko has become more popular in recent years among retired people who have nothing better to do and few opportunities for social interaction. However, the majority of older folks are on fixed incomes, and pachinko can be expensive. According to the Asahi Shimbun many are now turning to game arcades, or “game centers” in the Japanese parlance, and the arcades themselves are bending over backwards to accommodate them.

(more…)

Annals of cheap: Kenko.com

Friday, September 2nd, 2011

Water, water everywhere

Remember back in March, right after the earthquake, when people all over the Kanto area were cleaning the stores out of batteries and mineral water? It seems like a long time ago, especially to Kenko.com, an Internet sales company that specializes in “everyday goods.” Like a lot of retailers, Kenko.com made a lot of money in a short time and expected to keep making it, but people eventually calmed down. In the meantime, the company bought all the bottled water it could get its hands on and as a result it’s been left with a huge overrun of inventory. By June 11, its stock of bottled water was 37 percent larger than it was exactly a year earlier.

The loss in profits for the company as a result of this over-supply is estimated to be anywhere from ¥180 to ¥220 million for fiscal 2011, according to the Nihon Keizai Shimbun, and the stockholders are understandably anxious, so that means they’ve got to get rid of this water.

Consumers who are still edgy about radiation and cesium in their food and drink should note that the product Kenko.com is most determined to unload is Crystal Geyser, which is bottled in California. Right now you can get a case of 48 500-ml bottles for ¥1,290, which works out to about ¥27 per bottle. In fact, the whole Crystal Geyser line is cheap, maybe even cheaper than tap water. But there are other foreign water brands available: Contrex is ¥1,555 for a case of 24 500-ml bottles; 12 1.5-liter bottles of Volvic goes for ¥1,675. Even better is that, for the time being at least, there are no delivery fees for any bottled water products.

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