Yen for Living

Last summer when the antinuclear movement was receiving a lot of media coverage, the government and utilities justified their plans for reopening nuclear power plants with statistics purportedly showing how dangerously close to capacity electricity usage is in the summer, when everyone has their air conditioners on. Thanks to energy conservation efforts on everyone’s part there were no overloads, but in terms of households, reibo (cooling) only accounts for 2 percent of overall energy usage when measured in calories. Danbo (heating), on the other hand, accounts for 25 percent of home-energy usage.

Fill ‘er up: Kerosene station in Chiba

Of course, there are various methods for heating homes in Japan. In addition to electricity, there is natural gas, liquid propane gas and kerosene (toyu), but electricity has been increasing in recent decades as a means for home-heating. Between 1980 and 2005, the use of kerosene, which is utilized in space-heating “stoves,” declined from 71 to 45 percent in terms of heating needs in the Kanto area, while both natural gas and LPG increased from 21 to 35 percent and electricity from 8 to 20 percent. However, when you factor in all of a home’s energy needs — cooking, lighting, bathing, etc. — electricity accounts for 50 percent, kerosene 17 percent, natural gas 20 percent and LPG 10 percent of household energy consumption. That was for all homes in Japan in 2009. In 1973, electricity only accounted for 28 percent of overall household energy usage. So with the promotion of all-electric houses in recent years, the overall portion of home heating by electricity has probably gone up even more.

The peak period for electricity usage in the wintertime is between 5 and 6 p.m., and during the current sharp cold spell, electricity usage as reported by Tokyo Electric Power has been over 90 percent during the peak time slot. The main difference between wintertime and summertime is that power plants reduce capacity in the winter, so 90 percent represents less power usage in the winter than it does in the summer. Most air conditioners run on electricity, but as shown above heating systems use a variety of methods, so electrical usage is deemed to be less. But since electricity usage in the winter is on the increase, why aren’t power companies warning people to cut back when the usage gets close to the limit, as they did last summer?

Continue reading about wintertime energy conservation →

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Cleaning crew (in pink) waiting with the hordes at Tokyo Station for the train to arrive (photos: Jason Jenkins)

If, like thousands of others, you took the shinkansen (super express) during the recent New Year’s holiday break, when you arrived at a line terminal you likely saw uniformed cleaning crews waiting at attention for the train to stop. They would have bowed as you left the car and then scurried on board to clean it up before the passengers waiting on the platform were allowed to board. During this time of year, in particular, express trains are packed 24/7, and keeping arrivals and departures on time is the number one priority. These cleaners, on average, have only seven minutes to make the cars spic-and-span, and their methodical efficiency in getting that job done has made them heroes in the media, the newest symbols of Japan’s storied work ethic.

At least one book has been written about these train cleaners, CNN produced a special report on them and dozens of magazine articles have covered them in detail. A recent issue of Shukan Post concentrated on one of the companies, Techno Heart Tessei, which is a subsidiary of JR East. Right at the beginning of the article, the Post offers the opinion that these workers provide a positive example for any business in Japan. It then goes on to describe in detail the “shinkansen gekijo,” (bullet train theater): how the cleaners, both men and women, accomplish their “miraculous” task, which is methodical and reducible to the second. There is one cleaner per non-reserved car, two or three per reserved car.

Overhead racks are checked on the initial round while seats are reset to their original orientation and underfoot trash is quickly swept to the middle aisle. On the return round, window ledges, blinds and panes as well as folding tables are wiped; headrest covers are replaced if dirty. Then someone comes through with a broom to collect the trash. Separate staff handles toilets. All operations are checked by the supervising cleaner and cleared. Usually, these teams complete their jobs with more than a minute to spare. On the average, they clean 20 trains a shift.

Continue reading about train-cleaning "angels" →

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Stock up: Mizuho’s board in Yaesu

New prime minister Shinzo Abe would like you to believe that the recent rise in prices on the Tokyo Stock Exchange are his doing, and the start of the rise did coincide with his election as president of the resurgent Liberal Democratic Party. Some economists have dismissed this theory, saying the stock market was due for a cyclical upturn anyway, but we’re willing to give Abe the benefit of the doubt if only because stock markets are so fickle and sensitive that the TSE would probably change if Bank of Japan governor Masaaki Shirakawa announced he was only going to wear green ties from now on.

Media focus on stock prices has revived the call to get the average person involved in the game. Everyone agrees that if the market improves steadily the general economy will, too. Since the crash of 2008, sparked by the failure of the Lehman Brothers investment house, all the world’s stock markets have gradually regained their footing except for Tokyo’s, which is dominated by foreign investors. The TSE has improved but at a much slower rate, and experts agree it has a lot to do with the fact that the vast majority of Japanese are still wary of stocks as a personal investment. One of the primary reasons for Japan’s long-standing deflationary trend is the huge personal savings stash of ¥1,400 trillion, half of which is estimated to be “dead,” meaning it isn’t even in a bank account. If only 1 percent of this money were invested in stocks, Japan’s fiscal problems would be solved. There would be more money in general circulation, and banks would then relax their loan criteria, allowing more companies to borrow money in response to perceived demand. Atsuto Sawakami of Sawakami Fund, one of Japan’s leading mutual funds, has been traveling the country encouraging retirees to buy stock by pointing out that traditionally company stocks in Japan have been owned by other companies, which are always under pressure to sell, thus stifling the market as a whole. If more individuals bought stocks and kept those stocks for the long-term, prices would automatically go up. The response, according to the Asahi Shimbun, has been positive. Business magazine Diamond Online reports that only 6.6 percent of individual financial assets in Japan are invested in stocks, while in the U.S. the equivalent portion is 30.6 percent. More individuals are gravitating toward mutual funds, but the portion of assets invested in them in Japan is only 3.4 percent, while in the U.S. it’s 11.8 percent. Meanwhile, 55.8 percent of individual assets in Japan are in non-performing bank accounts. The equivalent in the U.S. is 14.7 percent. Continue reading about rising stock prices in Japan →

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By the gross: cheap reads at Book Off

There was only one book published in Japan this past year that sold at least a million copies: TV personality Sawako Agawa‘s volume of essays, “Kiku Chikara: Kokoro Hiraku 35 no Hinto” (The Power of Listening: 35 Hints to Get People to Talk About Themselves), a relatively inexpensive paperback published by Bungeishunju. Though the media has been claiming for years that reading is on the decline, a single million-seller is still pretty low by Japanese publishing standards. Last year, for instance, there were ten, and two years ago five. According to the industry organ Shuppan News, the main reason is that there were no topical books for publicity departments to push effectively.

Publishers and wholesalers usually focus promotion on titles they think will sell easily, but this year couldn’t find anything they really thought would catch the public’s imagination. The conventional wisdom about million sellers is that a good portion of them are bought by people who aren’t devoted readers. Remember the phenomenal sales for Haruki Murakami’s “1Q84″? Many of the buyers were people who were caught up in the “event.” They wanted to own a copy — or several, as the case may be. Some probably didn’t even read it. Experts say this phenomenon no longer applies. Interests have become more compartmentalized, more diverse. People no longer automatically buy a book or record just because everyone else does.

According to a recent article in Tokyo Shimbun, book sales in general have dropped. The peak year was 1996, when 915 million books were sold for a total of ¥1 trillion in revenue. In 2011, the total number of books sold was 700 million and revenues were ¥819 billion. This year, the drop is expected to be even greater.

Now, before you ask about the sales breakdown between printed books and e-books, keep in mind that sales of e-books remain relatively low in Japan, owing to industry resistance that is just now breaking down. The drop in sales has less to do with technology and more to do with demographics. In fact, the number of people who read regularly hasn’t really changed despite the decline in population. That’s because the loss in general readership is being compensated for by older retired people who now have time to read. However, these people don’t really care about owning books. The real reason for the drop in sales is that they have rediscovered the library.

According to the Japan Library Association, there were 2,522 libraries throughout Japan in 1998. By April 2011, that number had increased to 3,210. Last year, library users borrowed 716 million books, CDs and DVDs, a new record, which is surprising given that local governments are hurting financially and library budgets are usually one of the first things they cut.

Obviously, some rationalization is going on, but at least one local government, Takeyo in Saga Prefecture, has come up with — no pun intended — a novel solution. The city hired the entertainment media rental and sales company Tsutaya to run its public library and has saved 10 percent of its normal operating expenses in the bargain. In return, Tsutaya opened a store next door as a kind of annex to the library, complete with a cafe.

A researcher interviewed by Tokyo Shimbun said that the recession definitely has something to do with the boost in library usage. It has also boosted the success of used book chain stores like Book Off. Sales of used books have been increasing every year. Naturally, this is bad news for publishers and, especially, new book stores despite the fact that prices for new books are fixed by the publishers and can’t be changed by resellers. These prices tend to be set artificially high by making the print larger than necessary and dividing texts into multiple volumes. But as much as the publishing industry has tried, it can’t do anything about the used book market.

According to the Yano Financial Research Center, the market for used books in 2010 was ¥130 billion. Sales at Book Off alone amounted to ¥70 billion in 2010. Even if one keeps in mind that Book Off sells merchandise other than books, the retail giant obviously has a substantial share of the market. Their system is attractive to people who just like to read. You buy a used book for a few hundred yen, read it and then sell it back to Book Off for about ¥50. It’s especially attractive when it comes to best-sellers, for which there is usually a long waiting list at the local library. By their very nature of being best-sellers, there are usually a lot of them at Book Off, sometimes for as little as ¥100 plus tax.

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Sleeping alone in a place like this could cost you.

Japan’s national health insurance system isn’t perfect, but it’s fairly airtight. Unless you have a condition that might benefit from some sort of experimental treatment which has yet to be approved by the government, everything is covered, meaning you won’t pay more than 30 percent of the cost of that treatment. And if the amount you do pay exceeds a certain amount, the government will pay for most of that as well, so there is very little danger of, say, a patient having to mortgage his house to pay for care, even for a so-called catastrophic illness, which is something that occasionally happens in the United States.

But that doesn’t mean there aren’t medical situations where people end up paying a lot of money; it’s just that they probably don’t have to. This is why we’ve always been mystified by the supplemental health insurance business in Japan. Why buy extra insurance when the national system takes care of everything? One of the main reasons is private rooms, which the government doesn’t pay for. National insurance covers overnight stays, but only for non-private rooms, and only a very limited amount. If a patient wants a private or semi-private room, or even a special type of bed in a non-private room, he or she has to pay for it out of pocket.

Some doctors use this exception to make money. An acquaintance of ours, whom we’ll call A-san, recently told us a story about a visit she made to a private gynecology/obstetrics clinic in Saitama Prefecture. A-san was worried about her 77-year-old mother, who lives separately from her and has been suffering from a gynecological disorder for almost a year. Though she had been to her local hospital, the doctor there said he could not treat the condition properly, and while it wasn’t life threatening, it made everyday life difficult. A-san’s mother is on a fixed income and not tech-savvy, so A-san Googled the name of her condition and the first clinic that came up in the search said it had experience treating elderly women for that particular condition and happened to be not far from her mother’s home. She made an appointment.

The clinic’s owner and only doctor was quite chatty, and, after examining her mother, he told A-san that she needed an operation, and that because she had special insurance for elderly people she would only pay 10 percent of the surgery cost. In addition, since the surgery was expensive, she could apply for the kogaku iryo (high cost medicine) system, which would refund most of the 10 percent she would normally have ended up paying. In the end, she would only have to pay ¥44,400 for the actual operation.

But there was a catch. The clinic, which mostly catered to expecting mothers, only offered private rooms for ¥16,900 a night. The doctor said that following the operation, A-san’s mother would need to remain in the clinic for 10 nights, so altogether the operation would cost more than ¥200,000, not counting transportation to and from the hospital and whatever medication she would have to take. An interesting justification for extra charges...

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People in Japan who win prizes through the lottery (takarakuji) do not have to pay taxes on their gains, even if they win hundreds of millions of yen. However, people who win money betting on horses or other racing sports are required to report those earnings on their income tax returns. Why the distinction? Is it a difference in approach? Though both are forms of gambling, which is strictly circumscribed, lotteries are purely matters of chance, while betting on the ponies can involve calculation and experience. Only the tiniest fraction of the population could make a “living” from the former, by essentially winning a jackpot once, while there is a small but dogged subculture whose members at least like to think they can profit continually at the track.

Poster commemorating Japan Racing Association’s 150th anniversary

One person recently found out just how limited such a livelihood can be. A 39-year-old salaryman, whom the media hasn’t named, was recently indicted in Osaka for tax evasion. The man’s lawyer has told the press that he makes ¥8 million a year at an unspecified job. He is married and has one child with another on the way.

In 2006 he started spending enormous amounts of money on horse racing based on the belief that he could make a profit over time. Using software that “predicts winners,” he would analyze the statistics for individual horses and then bet on multiple contestants in individual races through the internet. He would not bet on races with horses making their debut since there wasn’t enough data available, but almost anything else was acceptable.

The point was to bet as much as possible on as many “favorable” horses as he could, including combination tickets. He lost most races, but he made enough on winning bets to pool that money and then use it for the next series of races. This sort of continuous overkill methodology meant that in the long run his winnings grew exponentially. During the three-year period from 2007 to 2009, he bought ¥2.87 billion worth of tickets and received winnings of ¥3 billion, thus making a net profit of ¥140 million.

However, he didn’t report these earnings on his tax return and eventually was audited by the Osaka branch of the National Tax Bureau. The amount they cited him for was not the ¥140 million he netted, but rather ¥2.9 billion — the ¥3 billion he grossed minus an expenditure of ¥100 million. Thus his tax bill for the three years is a whopping ¥570 million, and with the added penalty it comes to a total of ¥690 million.

Continue reading about tax on revenue from gambling →

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Private high school students boarding a private high school bus

The Asahi Shimbun and NHK recently ran features about the changing job situation for high school teachers, specifically those who work for private institutions. According to education ministry figures, there are about 90,000 teachers working at private high schools nationwide, a number that has stayed about the same since 2001.

About 34,000 of these teachers were considered “non-regular” in 2011, meaning they were either hired directly by the schools on a yearly contract basis or obtained through temporary human resources companies. That number represents 36.8 percent of all private high school teachers, whereas the portion of public school teachers who are non-regular is 19.7 percent.

Furthermore, since 2001, the number of regular teachers in private high schools has decreased by more than 4,000, mainly the result of attrition through retirement, while the number of non-regular teachers has increased by 2,800. During the same period, the number of students attending private high schools has dropped by about 15 percent, while the number of private high schools hasn’t changed.

Private high schools are under pressure to maintain enrollment just to stay solvent, and one of their main incentives to attract students is student-teacher ratios, the smaller the better. So even as the number of students declines, these schools have to maintain staff numbers, a situation that puts more strain on their budgets. They have to cut expenses wherever they can, and since 70 percent of a private school’s expenditures goes to personnel, teacher pay is the obvious target for rationalization.

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