Archive for the ‘Services’ Category

Build a multifunction restroom and they will come

Wednesday, August 14th, 2013

Room to move

Room to move

The big question for retailers and restaurants in Japan is how to attract seniors, regardless of what it is you sell or serve. One nonprofit Tokyo organization called Check is advising businesses to install so-called multifunction restrooms on their premises and then advertise the fact. Multifunction restrooms are larger than standard public restrooms and can accommodate wheelchairs, and the NPO’s research has found that older people are more likely to patronize a business that has one.

According to a study reported in Tokyo Shimbun, the average family with at least one senior spends four hours and ¥10,000 when they go out shopping, but 20 percent also say they will likely stay out longer and spend more money if they know beforehand the location of multifunction restrooms. The study group extrapolated on its findings and speculated that in terms of time the family would stay out 30 to 120 minutes longer, and spend ¥606 more.

Check, which was founded in 2008, has made a list of some 50,000 multi-function rest rooms throughout Japan, which it provides on its website. The NPO thinks there are about 100,000, and it is providing this information to local governments so that they can use it to promote their areas to local seniors and older tourists.

However, it should be noted that toilets in general are becoming something of a sales promotional tool. The Tokyo Metro subway system actually has TV commercials aimed at women showing how modern and clean their public rest rooms are. Lawson was the first convenience store to declare that its restrooms could be used by the public without the obligation of buying something, since people were so grateful for the service they usually bought something anyway. Most convenience stores have followed suit. And many restaurants explain their rest room facilities on their home pages and Tabelog sites, since many women won’t patronize restaurants that don’t provide separate facilities for men and women.

New tax-free investment scheme not likely to increase investment

Thursday, August 8th, 2013

The acronym NISA has a checkered image in Japan. To most people it stands for Nuclear and Industrial Safety Agency, the now discredited government organ that did such an ineffectual job of policing nuclear power plants prior to the Fukushima accident of March 2011. On Jan. 1, 2014, the acronym will take on a different meaning as the Japan (Nippon) equivalent of the U.K.’s Individual Savings Account system, under which individual investors in stocks or mutual funds will not have to pay taxes on dividends and capital gains. It sounds simple and irresistible, but according to Tokyo Shimbun it may prove to be as resistible as that other more toxic NISA.

NISA application

NISA application

At present, dividends and capital gains are taxed at a flat rate of 10 percent on personal income as part of a government incentive program to boost stock investment that will end this year. Originally, the taxation rate was going to return to 20 percent, the rate levied on regular savings accounts, which is what the finace ministry wants. However, the Financial Services Agency (FSA) thinks that more average people should be encouraged to invest in stocks and helped pass the NISA law, which was modeled after Britain’s.

On the surface, the system seems easy. Anyone 20 years of age or older can open a NISA account with a financial institution, but is limited to only one, and for four years the individual cannot switch his or her account to another institution. The account holder can put up to ¥1 million a year into the account for five years, which means the maximum amount of non-taxable investment at any given time is ¥5 million. The tax-free system itself is limited to ten years, meaning no investments in NISA can be made after 2023.

Unfortunately, there are other conditions that experts are saying may scare average people away. During a given year, the individual can redeem any dividends or capital gains that are earned but he cannot reinvest that money back into the account during that year. He can, however, reinvest it the next year as part of the ¥1 million maximum input allowed during a single year. Also, at the end of five years he can roll over the ¥1 million he invested the first year, and the next year roll over the ¥1 million he invested the second year, thus maintaining a ¥5 million maximum account over time. However, once ¥5 million is reached, he cannot make any “new” investments.

Banks and securities companies will start accepting applications for NISA on October 1, and competition for customers is already heated. The Japan Securities Dealers Association is airing commercials for NISA featuring idol Ayame Goriki, and most companies are offering ¥2,000 cash premiums as an incentive to sign up. The stated target of the FSA is first-time investors and young people, but Tokyo Shimbun doesn’t think the message will get through. Financial journalist Minako Takekawa told the newspaper that she believes the new system will only appeal to people who are already investing, and that it needs to be simplified greatly if it’s to appeal to a wider consumer base. She says Britain’s system is easy and popular, with 40 percent of the population signed up. Like Japan’s, the U.K.’s ISA system was originally only meant to last 10 years, but it has since been made permanent, with financial services companies devising lots of products that take advantage of ISA, including regular savings accounts. Takekawa went to London earlier this year to study the system and found that “even people who don’t have a lot of money find it easy to use.”

Popular economist and TV personality Takuro Morinaga told Tokyo Shimbun that the reason NISA is so convoluted is that the finance ministry made it so. He says the ministry is “greedy” for more taxes and so have sabotaged NISA by making it too difficult for the average person to understand. The ministry was counting on a return to the 20 percent rate at the end of this year, and suddenly they’re getting nothing.

Of course, one aspect of NISA that most experts overlook is that it’s risky. Unlike regular savings accounts, an investor’s principal is not guaranteed or insured. Consequently, even if the system is simplified, older people will be reluctant to join. And as for young people, they don’t have any money to invest in the first place, at least not until their wages are increased.

Pity the driver: Cabbie salaries much lower than average

Friday, August 2nd, 2013

Hurry up and wait

Hurry up and wait

Though customers aren’t expected to tip here, Japanese taxis are among the most expensive in the world, and next year rides will probably cost even more since the transportation ministry is considering removing the cap on fares and allowing a 2.86 percent rise to help taxi companies adjust to the consumption tax increase. That would boost the base taxi fare to ¥730 in Tokyo.

Before you start complaining think about the drivers. In 1995 the average salary of a Japanese cabbie was ¥4.03 million. In 2005 it was ¥3 million. And since the recession started in 2008 salaries have hovered between ¥2 and ¥3 million. There are various reasons for this loss of income, the main one being deregulation.

In 2002, the administration of privatizing Prime Minister Junichiro Koizumi allowed taxi companies to increase their vehicle pools. Between 2001 and 2007, the number of taxis nationwide increased by 15,000, driving up competition and driving down the amount of revenue per cab. In 2009, the government re-regulated the industry in an attempt to cut the number of cabs in 156 cities where it was deemed there were too many. Since then salaries haven’t gone down but they haven’t gone up either. Now taxi drivers and taxi companies are afraid because one of the pillars of “Abenomics” is, again, deregulation.

Though cabbie salaries compare to those of entry level jobs, most of the drivers are not entry-level workers. The average age is 56.8, and many have families to support. Moreover, the average number of years worked is 9.3, which implies that many cabbies started driving later in life, after they worked somewhere else and lost their jobs. There are very few taxi drivers in their 30s, even less in their 20s. Some older cabbies drive to supplement their social security.

In the July 4 issue of the Asahi Shimbun there was a profile of one male cabbie, 44, who has been driving since 2009, when he was laid off by a small company. The taxi company he works for has a sales quota. Each driver has to bring in ¥480,000 in fares a month. If the driver makes more than that, he gets to keep 53 percent as his commission. If he makes less, he only keeps 40 percent. The driver says he needs ¥250,000 a month to survive so he figures he needs to bring in ¥40,000 per shift, and it’s difficult. Apparently, some drivers supplement their revenues with their own money if they don’t earn their quota because they think it’s worth it in the long run.

Another taxi driver interviewed by the Asahi is 60 and has been a driver in Tokyo all his life. He supports a wife and grown son on ¥4 million a year and used to make ¥6 million. His normal work day is from 8 in the morning until 4 the next morning. The competition in Tokyo is so fierce that it’s sometimes impossible to find a place to wait for fares since so many other cabs are waiting. He tells the newspaper that some companies reduce their fares to be more competitive, which is illegal. Another common employer practice that may not be illegal but certainly seems unfair is subtracting the 4.8 percent handling fee from a cabby’s salary whenever a customer uses a credit card.

According to the Japan Federation of Hire-Taxi Associations, as of March 2010 there were 371,000 taxi drivers in Japan working for companies and 46,000 private taxi drivers. Of the former, 7,700 were women. The average number of hours for a cabbie is 193 a month. The average for all jobs is 183 a month. Revenues in 2010 nationwide amounted to ¥1.78 trillion. According to the labor ministry the average annual salary for a driver in 2011 was ¥2.9 million. The average for all industries is ¥5.26 million.

In Tokyo, all garbage is not created equal

Monday, June 24th, 2013

Why am I blue?: Trash in city-mandated garbage bags waiting to be collected

Why am I blue?: Trash in city-mandated garbage bags waiting to be collected

Two weeks ago the city of Chiba announced that it would start charging noncommercial residents for garbage collection in February. Like many municipalities throughout Japan it will use a garbage bag system: All refuse must be deposited for collection in special bags sold by the city. Presently, Chiba only charges businesses for refuse collection, but the cost of processing garbage continues to go up. In the beginning, residents will pay ¥36 for a 45-liter bag, regardless of whether the trash is burnable or non-burnable. That comes to about ¥0.8 per liter, which will only put a very small dent in the city’s revenue problems. Three years ago Chiba was spending ¥13.3 billion a year on refuse processing, and estimated that 45 liters worth of burnable trash cost ¥280 to dispose of. The same amount of non-burnable trash cost ¥220 to process.

According to Tokyo Shimbun, local governments started charging their residents for refuse collection around the turn of the millennium. Now, about 55 percent of municipalities in Japan do so, and most use the garbage bag system, which only pays for part of the cost. However, the burden on residents varies widely from one place to another, even within the prefecture of Tokyo.

People who live in the 23 wards don’t pay any extra for refuse collection, but those who live in the cities and towns of the Tama region of Western Tokyo pay a lot A woman interviewed in the article recently moved from Ota Ward to Mitaka City. Where she used to live she paid nothing for trash collection, but Mitaka requires that refuse be placed in bags, otherwise it won’t be picked up. A package of 10 purple 40-liter bags costs ¥750.

Continue reading about garbage regulations →

Insurance companies main beneficiaries of scheme to protect obstetricians from malpractice suits

Thursday, June 13th, 2013

In late May, 1,041 former obstetrics patients of 28 medical facilities submitted a plea to the National Consumer Affairs Center (NCAC) to arbitrate a settlement with the Japan Council for Quality Health Care (JCQHC) that would partially refund money they had paid during their pregnancies for insurance purposes. The JCQHC is a foundation that carries out third-party evaluations of hospitals and clinics, but it also oversees a special compensation system enacted by the government in 2009 to protect obstetricians from career-threatening malpractice suits.

The system allows for a form of insurance that all obstetrics patients, meaning pregnant women, pay into. If a fetus or baby suffers brain damage before or during delivery, the insurance pays up to ¥30 million in damages over the next 20 years to the child and his or her parents. This no-fault insurance system was put in place because fewer medical students were opting to become obstetricians, partially because the dwindling birthrate has made obstetrics less profitable, but mainly because malpractice awards in the cases of babies born with disabilities have been extremely high. It was just too financially risky to go into the field.

Pink is the color of the obstetrics department

Pink is the color of the obstetrics department

Unless a pregnancy threatens the well-being of the mother, childbirth is not covered by national health insurance. Though in theory the obstetrics insurance is optional, if a pregnant woman patronizes a medical facility that pays into the insurance system (meaning 99.8 percent of them) they automatically charge her the ¥30,000 premium and incorporate it into her bill. What complicates the matter is the so-called “public aspect” of the system, according to a recent article in Aera magazine.

To encourage women to have babies, local governments compensate them for the money they spent on childbirth after the fact with something called shussan ikuji ichijikin (one-time payment for childbirth), a handout administered by the National Health Insurance Union (NHIU) of up to ¥420,000 per birth, regardless of how much money the patient spent.

This amount includes the ¥30,000 premium that the woman paid for the obstetrics insurance, so in effect the public is paying for the insurance since the NHIU uses taxpayer money as well as national health insurance funds for payments. In that regard, Aera has characterized the JCQHC as an amakudari institution; in other words, a bureaucratic entity whose main purpose is to justify its own existence.

Since the insurance system was launched in 2009, it has paid out about ¥4.1 billion in compensation for damages suffered during childbirth. At the end of the last fiscal year there was still about ¥80 billion in the reserve pool of funds and it is estimated the pool, which is controlled by the five insurance companies, will increase to ¥100 billion by the end of the present fiscal year.

According to Aera, the JCQHC originally estimated that between 500 and 800 babies would suffer brain damage every year out of the country’s 1.2 million births, but real statistics for fiscal 2012 show that only about 200 babies suffered such damage. The mothers who requested arbitration from the NCAC are claiming they overpaid for the insurance and are demanding ¥20,000 each in refunds from the JCQHC. If they win, the organization will have to pay a total of ¥20.8 million. As Aera notes, more than 50 million women have paid this premium since 2009, though, strictly speaking, it is the public who has paid the premiums.

One obstetrician interviewed by Aera says that the reason all medical institutions sign up for the insurance is that part of the law mandates that any medical facility which applies for “high-priced medical care” compensation to the NHIU cannot be approved if it doesn’t pay into the obstetrics compensation insurance plan. Otherwise, the facility can only receive maximum compensation of ¥400,000 for each delivery, regardless of what it cost the facility. That’s too risky for smaller clinics.

The main beneficiaries of the system are the private insurance companies that participate. The premiums are practically free money since the companies are allowed to collect and administer the funds. Also, brain damage resulting in cerebral palsy is difficult to diagnose in an infant, and there is a five-year time limit for insurance claims.

In many cases, developmental disorders arising from brain damage don’t manifest themselves until the child is older and the time limit has passed. However, the insurance companies are also using this aspect to explain why they need such a huge pool of money.

Of children born in 2009 who were eventually found to suffer from cerebral palsy due to brain damage, 12 were discovered in 2009, 100 in 2010 and 158 in 2011. Diagnoses are thus progressive, so the insurance companies say they need this huge surplus to meet future claims. But there has already been discussion in the Diet that the funds should be administered by a government body so as to relieve some of the public burden associated with medical care.

In any event, as some pediatricians have noted, ¥30 million over 20 years is insufficient to take care of most people who suffer from cerebral palsy. They tend to require 24-hour care the older they get. As one mother who is part of the arbitration claim told Aera, a system for compensating brain damage victims directly would be cheaper, more efficient and more humane than the obstetrics compensation insurance, which benefits administrators more than doctors or patients.

You can’t get there from here (at the same price with an IC card)

Saturday, May 18th, 2013

Cash or over-charge?

Cash or overcharge?

This spring the big news for train lovers was the integration of almost all the regional IC card services, thus making it possible to travel from one region to another on lines operated by different companies using a single IC fare card. But while computer systems have been linked successfully to allow for such inter-line transfers, one element of the changeover that has bothered public officials remained problematic: the non-integration of fares.

In some instances it actually costs more to go from point A to point B using an IC card than it does with a ticket, though most patrons aren’t aware of the fact. It depends on which lines you are using. For instance, if you are going from JR Kameari Station on the Joban Line in eastern Tokyo to JR Yokohama station and buy a ticket for the whole trip, it costs you ¥780. However, if you take the same route and use an IC card, ¥910 will be subtracted from your card balance. That’s because the Joban line turns into the Chiyoda subway line, which is operated by Tokyo Metro, after it passes Kita Senju, and the passenger then leaves the Chiyoda Line at Nishi Nippori and transfers back to JR in order to proceed on to Yokohama.

The ticket you buy from a vending machine takes these transfers into consideration and simply charges the zone-related JR fare between Kameari and Yokohama plus the Metro fare. But the IC card system doesn’t make such a distinction and each of the three legs of the journey is charged separately, meaning you pay two JR fares, one from Kameari to Kita Senju and another from Nishi Nippori to Yokohama, plus the ¥160 for the Chiyoda line between Kita Senju and Nishi Nippori.

The sticking point is JR East, and in Diet discussions about the IC fare discrepancy representatives of the company have said it’s a computer-related problem that they have yet to figure out, claiming that any changes to rectify the problem would “place on the system more of a burden” that might cause even more issues.

At the urging of Your Party the company did say it would make more of an effort to inform patrons of price differences where they occur. The various JR companies offer the Suica card system, but the equally popular Pasmo card has the same problem. In the Tokyo Metropolitan Area 80 percent of riders use one card or the other.

The problem is limited to transfers between JR and other lines. Other inter-line transfers don’t have the same problem. In fact, discounts that are normally offered to ticketed riders between the two Tokyo subway lines are integrated into the IC card fare structure, even when passengers leave one line through a wicket and enter the other through a different wicket. A transportation expert, discussing the problem in Tokyo Shimbun, said that such a change shouldn’t require a major system overhaul, and, in fact, JR recently announced it would make it possible for IC cards to subtract amounts of less than factors of ¥10 in line with the consumption tax increase, which means amounts of factors of ¥1 can be charged, but only if the patron has an IC card. Fares for tickets will still be rounded up to a factor of 10.

The fact is, the ticketing system costs operators more than the IC card system, which is why in London you pay less if you use a card than if you buy a ticket. Ideally, all patrons should use cards, so JR’s intransigence on the matter is difficult to explain.

As land lines go the way of the dodo, what is a subscription right worth?

Monday, May 13th, 2013

Anyone who still owns, much less uses, a fax machine may be embarrassed by the fact. The rest of the developed world has abandoned the device, and it seems that only in Japan is its utility valued, if for no other reason that to send maps to people who still don’t know their way around Google. And the same march of technology that has rendered the fax obsolete is making land lines an unnecessary expense. Most young people who acquire their first apartments don’t bother applying for them. Their mobile phones are perfectly adequate.

What the hell is that?

What the hell is that?

So what about those of us who still have land lines? More specifically, is the kanyuken — the subscription right to the line — worth anything? Once upon a time it cost as much as ¥80,000 to have a telephone line set up in one’s name. That was the cost of the right to a subscription, a kind of investment in the country’s telecommunications infrastructure, and you carried it with you your whole life; unless you wanted to sell it, which you could do. In fact, there was a market, with agents willing to broker your kanyuken to others. Though no one ever made money off their subscription rights, some people used it as security for small loans or pawned them.

Japan started offering telephone service in 1890, but the kanyuken system didn’t begin until 1897, when it cost ¥15. However, households didn’t really start getting telephones on a major scale until after the war, and it wasn’t until the late 1960s that more than half of the country’s population had phones in their homes. Many, in fact, were party lines. By 1976, the kanyuken cost more than ¥75,000, and subscribers could pay in installments. The telephones themselves were rented not owned. NTT was privatized in 1985, at which point the price of a subscription right dropped to ¥72,000, not including tax. It’s been slowly decreasing ever since. Since 2005 it has cost ¥36,000, though you can buy it on the market for as little as ¥11,000. NTT does not and never has bought back such rights, so once you purchase it it’s yours forever unless you unload it on someone down the line, and that’s becoming increasingly difficult. Few businesses now trade in kanyuken, though we did find one on the Internet that was offering ¥1,500 for a subscription right.

Consequently, some people forget that they have kanyuken. They move house and instead of having the land line in their new abode turned on, they just use their cell. In such situations, however, you still have to tell your local NTT office that you want to keep the right to a land line. After you do that they will send you a riyo kyushi no shirase (notice to stop usage), which allows you to maintain your subscription right, but only for 10 years. If you don’t re-remind the phone company that you want to keep the right, then after 10 years it expires and the shisetsu setchi futankin (money to facilitate operations) becomes invalid. Of course, during that time if you decide to reactivate your land line then the right is automatically preserved. In fact, the phone company recommends on the notice that you contact them every five years to confirm your subscription right. You never know. Faxes may make a comeback.

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