Disappearing Disposable Income: Worker Spending Trends Since the Bubble Economy


The height of the economic bubble in Japan was about 30 years ago, at the dawn of the Heisei era. Average salaries climbed for roughly a decade after that, but have stagnated since peaking in 1997. Despite showing modest gains since 2012, incomes—and disposable income enjoyed by workers—remain in the doldrums.

In 1989, the first year of the Heisei era, Japan’s economy was at the height of its asset-fueled growth bubble. The decades since then have seen tumultuous times in the economy, with the bursting of the bubble, the collapse of major financial institutions, and the global financial crisis that erupted a decade ago.

How have the financial circumstances of workers changed over the past three decades? Below we take a look at trends in full-time workers’ incomes and the spending money at their disposal.

Pay Peaks in 1997

As Japan’s bubble economy reached its zenith at the end of the 1980s, the average salary of workers was increasing sharply; it continued to do so for some years after that, in 1997, reaching its peak of ¥4.67 million.

Average pay went downward slope thereafter, falling to ¥4.06 million in 2009, due in large part to the aftermath of the global financial crisis touched off the year before. Over the last decade, however, there has been more or less steady growth in salaries.

More Pay, Less Spending Power

However, despite salary increases, people’s wallets remain thin. When the cost of living is taken into account, there has been a general decline in recent years, particularly since 2012.

The rise in expenses like social security are an increasing burden on households, and this seems to have a great impact on the spending ability of working people.

Workers’ average pocket money—the amount of disposable income they have to spend in a month—is at its lowest level in 30 years. This peaked at ¥77,725 during the height of bubble, but had fallen by more than half as of 2017, when it was just ¥37,428.

Workers’ Pocket Money Use

1 Drinking 53.0%
2 Lunches 42.9%
3 Books and magazines 26.7%
4 Hobbies 24.1%
5 Clothing 20.3%
1 Lunches 51.2%
2 Hobbies 28.2%
3 Drinking 28.1%
4 Mobile phone costs 26.6%
5 Discretionary goods 24.6%

Source: Shinsei Bank survey on worker spending

Compared to the years of the economic bubble, the percentage of respondents today who say they use money for drinking has declined markedly, while spending on lunches has taken the top spot.

However, in 1992, lunches averaged ¥746 per serving, more than ¥150 higher than the ¥590 average reported in 2017.

Workers notable reasons for economizing. When will the benefits of the second longest economic boom after WWII arrive?

Voices from the Street

The people below were interviewed about how their discretionary spending has changed in recent years.

Man (age 50–59, working in manufacturing)
“The way money is spent now is different from how it was done during the economic bubble. Things were fast and loose in those days. Nowadays I have about 50,000 yen to spend each month. Since I have to foot the bill when drinking with my subordinates, I go home early and try not to get invited often.”

Man (40–49, food processing)
“Purse strings are tight now. When I was young, I had the wherewithal to drink at parties, enjoy my hobbies, and go traveling. But prices have risen little by little, and school tuition for my kids is also pretty expensive. My salary has not been rising to keep up with my costs.”

Man (30–39, real estate)
“My pocket money is between 40,000 and 50,000 yen. Honestly, it’s not enough. If I’m to consider paying for my subordinates when we go out, I would like to have 70,000 to 80,000 yen.”

Man (20–29, credit research)
“I save money every month and thought that I would be able to save about a million yen by my third year, but I can’t seem to get there at all. I only go out drinking if it’s with my boss, who will take care of the bill. I wish for my burdens to be eased, even if only a little bit.”

Woman (20–29, medical development)
“I’m not saving as much as I thought I would. My rent is high because I live in Tokyo. I am envious of my parents because they’re from the generation that thrived during the bubble economy. The amount of savings I have is less than theirs at the same age, and our salaries are also completely different.”

Toward More Individual Approaches to Money

The Japanese economy appears mired in an era of perennial low growth, and the low interest rates mean negligible returns on savings. How will money usage change in 2019 and beyond?

Management consultant Matsue Hideo says, “In thirty years, I’ve seen bubbles and deflation as well as prices both high and low. Recently economists talk about ‘variable consumption’—a sort of polarization occurring, where people are willing to pay high prices for things they feel they need, while spending the bare minimum on things they show less interest in.”

Furthermore, he says, “Money itself will become more personalized and individualized in the future. Various forms of money, like virtual currencies, coupons, and regional currencies have come into being. I think we’re heading toward an era when individuals manage more of their own flows of income, for instance through barter at flea markets, and make more use of forms of monetary value other than fiat currencies managed by governments.”

(Originally broadcast in Japanese on FNN’s Prime News Alpha, August 14, 2018. Translated by Nippon.com.)


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