Sunday, August 08, 2010

Economic Stagnation Is Creating a Nation of Lost Youths

Charles Hugh Smith has published an earthshaking article in Daily Finance about how in Japan, twenty years of economic stagnation is having devastating effects on the kids who grew to maturity during this time.

You can read the entire article at:

This article has such insight for America as well that I have copied it here too:


What happens to a generation of young people when:


The low pay makes living at home the only viable option?

For an answer, turn to Japan. The world's second-largest economy has stagnated in just this fashion for almost 20 years, and the consequences for the "lost generations" that have come of age in the "lost decades" have been dire. In many ways, Japan's social conventions are fraying under the relentless pressure of an economy in
seemingly permanent decline.

While the world sees Japan as the home of consumer technology juggernauts such as Sony and Toshiba and high-tech "bullet trains" (shinkansen), beneath the bright lights of Tokyo and the evident wealth generated by decades of hard work and Japan Inc.'s massive global export machine lies a different reality: increasing poverty and decreasing opportunity for the nation's youth.

Suddenly, It's Haves and Have Nots




Many fear that as the generation of salaried baby boomers dies out, the country's economic slide might accelerate. Japan's share of the global economy has fallen below 10% from a peak of 18% in 1994. Were this decline to continue, income disparities would widen and threaten to pull this once-stable society apart.

Downsized Expectations, Opting Out

The Japanese term ''freeter'' is a hybrid word that originated in the late 1980s, just as Japan's property and stock market bubbles reached their zenith. It combines the English ''free'' and the German ''arbeiter,'' or worker, and describes a lifestyle that's radically different from the buttoned-down rigidity of the permanent-employment economy: freedom to move between jobs. This absence of loyalty to a company is totally alien to previous generations of driven Japanese "salarymen'' who were expected to uncomplainingly turn in 70-hour work weeks at the same company for decades, all in exchange for lifetime employment.

Many young people have come to mistrust big corporations, having seen their fathers or uncles eased out of ''lifetime'' jobs in the relentless downsizing of the past 20 years. From the point of view of the younger generations, the loyalty their parents unstintingly gave to companies was wasted.



Changed Men

The decline of permanent employment has also led to the unraveling of social mores and conventions. The young men who reject their fathers' macho work ethic are derisively called "herbivores" or "grass-eaters" because they're uncompetitive and uncommitted to work.

Take the bestselling book The Herbivorous Ladylike Men Who Are Changing Japan, by Megumi Ushikubo, president of Infinity, a Tokyo marketing firm. Ushikubo claims that about two-thirds of all Japanese men aged 20-34 are now partial or total "grass-eaters." "People who grew up in the bubble era [of the 1980s] really feel like they were let down. They worked so hard and it all came to nothing," says Ushikubo. "So the men who came after them have changed."

This has spawned a disconnect between genders so pervasive that Japan is experiencing a "social recession" in marriage, births and even sex, all of which are declining.

With a wealth and income divide widening along generational lines, many young Japanese are attaching themselves to their parents. Surveys indicate that roughly two-thirds of freeters live at home. Freeters ''who have no children, no dreams, hope or job skills could become a major burden on society, as they contribute to the decline in the birthrate and in social insurance contributions,'' Masahiro Yamada, a sociology professor wrote in a magazine essay titled, ''Parasite Singles Feed on Family System.''

Take My Son, Please



The unraveling of Japan's social fabric as a result of eroding economic conditions for young people offers Americans a troubling glimpse of the high costs of long-term economic stagnation.