Social Class in Japan

Income disparity and luxury brands
14 August 2007
A look at the recent rises in income disparity in Japan and the impact on luxury brand consumption.
Summary Points:

•  Objective data shows a growing income disparity in Japan, but more importantly, the Japanese have abandoned belief in the “everyone is middle class” myth and now see the nation divided into two groups: upwardly-mobile “winners” and downwardly-mobile “losers.”

•  The rise of class-consciousness may help explain the widespread preference for conspicuous European luxury brands amongst young women over the last decade.

• At the moment, Japan’s burgeoning New Rich seem to enjoy flamboyant spending and easily-identifiable luxury brands. This, however, could possibly change to more nuanced and sophisticated spending – i.e., “high sense.”

Introduction: Income Inequality in Japan

Fashion has always been a social phenomenon explicitly linked to the expression of socioeconomic class. Since time immemorial, class-consciousness, class aspiration, and group distinction have a huge influence on fashion patterns and expectations.

Traditionally, however, class did not seem to play a visible part in the post-war Japanese fashion environment. The fashion market developed in Japan during the high-growth period of the 1960s – a time in which incomes rose for all levels of Japanese society. Building upon this base of relative income equality, post-war Japan never developed clear-cut class distinctions in society. As a result, luxury fashion in Japan arose as a solidly middle-class institution, which is to say, something available “to all” – at least psychologically, if not practically-speaking. Although certain political forces may have encouraged the blurring of class lines, the end result was that the Japanese media generally spoke to the public with a single voice, advocating a generic “middle class” recipe for proper consumption.

Things began to slowly change in the exorbitant wealth of the Bubble period of the late 1980s. Those who struck gold in rising land prices and rampant speculation spent their money with serious gusto – suddenly challenging society's ubiquitous adherence to the “middle class” standard. The post-Bubble period brought even more structural changes to Japanese socioeconomics as companies restructured for a return to profitability. Jobs were slashed, and the new reliance of “non-regular” workers has decreased the number of young people who can make it through the narrow door to the white-collar management track.

Currently, there is no longer any doubt about disparity in Japan. Japan’s Gini coefficient – a standard measure of income inequality – is now well above the OECD average.1 Relative poverty – the number of individuals living under one-half the median income – in Japan is second highest in the OECD (Organization for Economic Co-operation and Development). Japan was the only country to record an increase in the proportion of population living in absolute poverty from the mid-1980s to 2000.2 In the past, Japan’s Gini loomed near the famously egalitarian Scandinavian countries, and even with slight increases, close to the somewhat socialist nations in Western Europe. Now Japan’s rates sit nearer the United Kingdom and the United States. For example, Japan’s relative poverty rate for 2000 was 13.5%, compared to 13.7% for the U.S.3

In the last few years, the rise of “freeter” (young part-time workers with no career prospects) and “NEET” (Not in Employment, Education, or Training) has publicly called into question the ubiquity of children sustaining their parents’ middle-class lifestyles. Marketing guru Atsushi Miura’s book on downwardly mobile individuals – Karyuu Shakai – was a bestseller, suddenly thrusting the idea of coming class divisions onto prime-time television shows and magazine headlines. A December 2005 issue of AERA somewhat sarcastically proclaimed, “We support the upper class and the lower class!” – subtly suggesting that the Japanese “mass middle class” no longer exists. As pundits debate the inevitable poverty of under-motivated youth, the rise and fall of “millionaire IT CEOs” like Livedoor’s Takafumi Horie and other members of the so-called “Hills-zoku” have demonstrated society’s new tolerance – often, enchantment – with the celebrity of conspicuous wealth. In socioeconomic terms, the middle-class is being squeezed out by contemporary institutional arrangements, and in cultural terms, Japan now sees itself in a more divisive perspective – some individuals are obviously downwardly mobile and others obviously upwardly-mobile.
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