Yen for Living

From heaven Audrey guarantees that your donation to UNICEF is tax deductible

Around this time of year, letters to the editors sections of the national newspapers are filled with tales of people filing income tax returns and coming away confused. One 65-year-old man wrote to the Asahi Shimbun recently about tax deductions for donations to charities and non-profit organizations. He brought receipts for four donations he made, and the tax office accepted two of them, one for UNICEF and the other for Doctors Without Borders, but rejected the other two, both of which were for contributions he made to local NPOs who worked with homeless people. The letter writer was understandably disappointed and quoted the well-know physician, Dr. Shigeaki Hinohara, who is a strong advocate for a broad and transparent tax deduction system so that Japanese people will contribute more freely.

Japanese people donate about ¥260 billion a year to charities, while Americans donate about ¥20.4 trillion, or 8 times as much. Accordingly, Japan has been called, usually by the Japanese themselves, a “no-donation culture,” which makes it sound as if the very idea of contributing to charities were something they can’t get their heads around. This is a myth, or, at least, a convenient means of explaining the lack of structural encouragement for donations. Almost every day on the news you see people collecting money for immediate, specific needs, like earthquake relief or overseas surgery for some poor sick kid, and people always give, but in those situations we’re talking small change. On a larger level people don’t give because they are not encouraged to do so.

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The is the kind of rental the government probably has in mind

One of the economic countermeasures adopted by the previous administration of Taro Aso that has been retained by the Democratic Party of Japan was the allowance for people who had lost their housing as a direct result of having lost their jobs. In most cases, the reason they lost their housing was because the place they were living in was either owned or subsidized by their employers. The DPJ plan originally earmarked ¥70 billion for this allowance, and an additional ¥30 billion has been set aside for it in the supplemental budget.

Local governments started accepting applications for the allowance last October. Rent subsidies last for six to nine months and the amount of the allowance depends on the location and other factors. For Tokyo residents, it comes to ¥69,000 a month for a “family” and ¥53,700 a month for a single person. The allowances would be handled by the welfare ministry in collaboration with local governments.

The ¥70 billion that has been set aside was calculated to cover 320,000 people. However, during the first three months that applications were accepted only 11,518 people applied and about 7,900 of them have so far qualified for the allowance. Local governments blame poor communications for the low demand, but there’s another, more significant reason why people aren’t flooding welfare offices to apply: They know it won’t mean anything.

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Not just for rabbits any more!

The Ministry of Internal Affairs and Communications just released economic figures for the last quarter of calendar year 2009. Their survey found that the average expenditures of a Japanese household, including one-person households, was ¥253,720. That’s a 2.9 percent decrease from the same quarter in 2008, or 1.4 percent down if you take into consideration price changes.

This figure means little unless you know the  income of an average family, which has 2.79 members and an average age of 45.2 years. Among “working households,” meaning households whose income is from employment and not from pensions, the average monthly income was ¥464, 649, which represented a 4.6 percent drop from the same quarter the previous year, or 3.1 percent after adjustment.

These statistics indicate that households spent less because of a decrease in earnings, and since certain expenses can’t be cut or reduced, such as utilities and expenses for education, the ministry tried to figure out what these households were doing without. Leisure, eating out and clothing were three items that received the axe, and since more people were eating at home, they also tried to save money at the supermarket.

And according to the Asahi Shimbun, the ministry found that households consisting of two persons or more reported a 10 percent increase in their consumption of moyashi (bean sprouts) over the same quarter in 2008. In fact, the ministry discovered that moyashi consumption has increased steadily over a period of 10 consecutive quarters.

The focus on the lowly bean sprout here would seem to indicate that the ministry has decided moyashi is a good index for determining the economic health of the average household. Moyashi are cheap and plentiful. A bag weighing 200 grams is usually between  ¥35 and ¥40 yen in a supermarket, but you can usually buy the same amount for ¥29 in discount food stores and even cheaper on special sales days. Japanese traditionally use moyashi to increase volume for any number of dishes, but there’s also a whole  food culture built around the sprout. Made from mung beans, they are also notoriously nutritious and always in season, since they aren’t “grown” in soil but rather sprouted in water. What’s interesting is that the government assumes people are buying more moyashi not because they like it or want a healthier diet, but because they want to save money. We won’t argue with that, but we also really like moyashi. Especially in ramen.

Celebrating Chinese New Years at Laox

The sorry state of Japanese department stores has one hopeful sign: Chinese tourists seem to love them, or, at least, the richer tourists do. According to TV Tokyo’s “Business Satellite,” many of Japan’s nicer department stores are directly catering to Chinese visitors, who are reacting favorably to the attention by whipping out their Union Pay cards, which qualify them for discounts at a lot of Tokyo retailers, including most of the electronics stores in Akihabara.

And right now is the prime time to catch them since it’s Chinese New Year when Chinese people traditionally open their purses and spend big. If you go to the Laox Duty Free store on Akihabara’s main drag you’ll see tour bus after tour bus pull up in front and disgorge happy shoppers from the mainland, Hong Kong, Taiwan and Singapore.

It’s more than just the duty-free aspect that brings them to Laox. The company went through a thorough reorganization last year that involved the closing of most of its suburban branches and a hefty investment from a Chinese company. In fact, the president of Laox is now Chinese, and he’s made sure that every tourist who comes to Japan has the Akihabara store on his or her itinerary. Since the store reopened in October, sales have been very good, since the buyers have focused on merchandise that specifically target Chinese rather than Japanese.

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Promise, Pocket Bank, Acom up to their old tricks again?

Last month the consumer finance company Promise started closing some of its retail outlets, specifically those that still feature human beings. Thirty percent of the company’s staff will be laid off by the end of the year. Promise is currently the biggest of the consumer lending companies that were making so much money at the beginning of the last decade, with 1,361 unstaffed branches and 148 staffed. It was also the first to announce the closing of branches, though according to an article in the Asahi Shimbun all consumer finance companies are following suit. Acom started whittling away at its 118 branches last September and will have only 45 by March. Aiful will have reduced its original 96 stores to 28 by the end of February. And Takefuji will have reduced its 180 outlets to 100 by the end of the year.

Several years ago the consumer finance industry was hit with multiple lawsuits from customers who said the companies were charging too much interest. Courts agreed and awarded large settlements, and in 2006 the government changed regulations to get rid of the so-called gray area that allowed for such exorbitant interest rates. In June, the Money Lending Business Law will start to be enforced, greatly restricting loan extensions. Almost all of the consumer loan companies declared bankruptcy after 2006 and have had to reorganize in order to stay alive. In most cases they’ve gotten back on their feet thanks to their partnerships with major banks, many of which predated their bankruptcies.

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An egg-celent price, eh?

In Japanese, the term yutosei, or “honors student,” has a wide range of usage that can go beyond the animate. For instance, in the food retail business, eggs and milk are often referred to as “excellent pupils” in that they’ve maintained a stable price over time.

Eggs in particular. Between 1955 and around 1980, the price of 10 eggs (about a kilogram) fluctuated between ¥200 and ¥350. By the bubble years of the late 80s the price had stablized back to around ¥200 and has essentially stayed there ever since, which means that it costs about the same to buy an egg now as it did to buy one in the lean years after the war, when an egg almost qualified as a luxury food item.

Consequently, eggs have always held a certain iconic position in the Japanese diet, and lately have been used by supermarkets and other food retailers as loss leaders or medama shohin, meaning merchandise that are advertised at ridiculously low prices in order to draw customers into a store where they will presumably buy other products. The Price, Ito Yokado’s chain of discount supermarkets, last week was advertising packages of 10 eggs for only ¥99, and I saw a piece on TV Tokyo’s Business New Satellite that mentioned a supermarket that was selling them for ¥88.

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The survey doesn't ask how new grads feel about wearing cheap suits

Nihon Seisansei Honbu, a research center that specializes in productivity, has carried out a survey since 1991 among recent college graduates who have entered the work force. They hand out the questionnaires twice a year, once in the spring just as new grads are starting work in their shiny new suits, and a second time six months later after the same shakaijin (members of society, which is what you are called once you actually enter the work force) have had a chance to see what the working life is all about.

In 2006 the survey started including a statement that went something like “I don’t need more money than others my age as long as I am making enough to live on.” Last spring, only 36.2 percent of those surveyed gave an affirmative response to this statement, but six months later the percentage rose to 41.7 percent, the highest it’s ever been. Granted, negative responses were higher, 52.9 percent, but Asahi Shimbun, for one, analyzed these results as meaning that the longer these people were on the job, the more they realized how precarious their situation was. Being employed wasn’t a guarantee.

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