Working Poor in Japan – Problems or Untapped Business Opportunities?
By just walking on the streets, with all their glittering lights, you may not believe that poverty exists in Japan. The working poor have received a lot of media attention, especially last year when NHK broadcasted a series of special television programmes about the working poor. The working poor have had the public’s attention again due to the recent economic anxieties in Japan.
Increase of working poor, little by little
The working poor, who are also called ‘Wa-kingu pua’ in Japanese, are individuals and families who maintain their employment, but remain in poverty because they receive a low income. There are no official definitions of poverty in Japan. However, low average income is often used as one of the measures of poverty. According to the National Livelihood Survey, in 2006 18.9% received 2 million yen as their annual income, where the average annual income was 5,64million yen.
More income inequality between the poor and the rich
While there has been an increase in the population of those on a low income, the population of rich people has increased, especially after the economic bubble burst. According to the OECD working paper published in 2007, the Gini coefficient, which is a common measure of household income inequality, rose for the total Japanese population by 9.4 percentage points from the mid-1980s to 2000, a large increase compared to the OECD average of 4.3 percentage points. This means that the saying ‘all Japanese have money’ is not true anymore.
Insights out – More marketing attention to the rich, but likely to be little to the poor
Many companies have been focusing on the rich, and/or Baby Boomers, who have a large amount of retirement money. Many financial institutions provide asset management consultation services, such as private banking services for ‘fuyuusou’ (the rich). There also many marketing services that target the rich, such as ‘YUKASEE’, the premium SNSs limited for the rich, and direct market services for companies who target the rich. The market for the rich seems to be getting overcrowded. However, do business opportunities exist just for the rich?
Paradox shift – Not economic burden but potential business opportunities
Those on a low income could provide potential opportunities for wealth creation in Japan. As C. Prahalad indicated in the book ‘The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits’, we should stop thinking that the poor are victims, rather they are ‘value-conscious consumers’. There may be various approaches that companies could take, particularly as part of their corporate social responsibilities.
The working poor are not just a matter for the government and public sectors to deal with. I believe that companies who succeed in the market could benefit from the working poor not only financially, but also socially.
January 18 2008 08:19 am | Economy
Ken on 21 Jan 2008 at 2:14 AM #
The most recent labor force survey showed cash payments bumping up 0.1% in November, and that was only the second month in 2007 that has reported a gain in income. I’ve set to see good figures showing how the retirement of baby boomers combined with the increase in contract/part-time workers (now past 30% of the workforce) is affecting wages, but it seems to be one of the driving forces behind the income gap.
It doesn’t look like this trend is likely to be reversed any time soon. The government is looking to further deregulate the dispatch agency sector, which is only bad for workers. The Toyota union is apparently looking for something like an average 1,000 yen per month raise for its employees at the shunto, which is a joke.
Given rising food and energy prices, there is going to have to be more marketing attention paid to the ‘value-conscious consumers’ - what a euphemism! I think that in 2008 we’re going to start to see it more and more in the supermarket industry, which needs to do something to recoup sales lost to convenience stores. Department stores, after eleven straight years of falling revenue, are going to have to shift their focus and be able to compete for the ‘value conscious’ yen.
Noriko on 22 Jan 2008 at 12:11 PM #
Population aging is one of reasons for boosting the inequality along with changes in the labour structure for sure.
We can see Japanese consumers becoming more conscious about value against how much they pay. Nowadays, flea markets become popular among Japanese. There is even a “flea market” guide on the website!