Hike in Consumption Tax and its Effect on Cost of Living in Japan

The Japanese economy has been shrinking, and it showed negative growth this year for the third consecutive year. One of the reasons attributed to this phenomenon is reduced spending in the market by consumers. Government authorities blame this on the global economy, which is sluggish and has been uncertain for the past many years. Since the Lehman collapse, the global economy perspectives have never been promising. In an effort to bring up the Japanese economy, the government has devalued the yen manually, which helped the exporters to make more profit. How these measures helped the economy is still under debate, as there should always be a trade-off between the imports and exports.

It is a fact that ever since the government hiked the consumption tax from 5 percent to 8 percent, many people have started putting control on their spending. This control over spending in the market has created less money flow from consumers, the direct impact of which has been visible in the form of shrinking the domestic business. People are more cautious now as they expect one more hike in the consumption tax, which is due in April 2017. The government had delayed the hike, which was supposed to get implemented in October 2015. The consumption tax is 8 percent now, which will be raised to 10 percent. To compensate for the effects of the tax hike, the government has been putting pressure on companies to increase the wages of employees. Many Japanese companies have taken a conservative approach to the increase in salary. Salary has not been increased up to the expectation of economic policy makers.

The practical effects of a consumption tax hike are like this:

Prior to April 2014, if a consumer bought furniture having a displayed price of 100,000 Yen, the consumer had to pay 105,000 Yen.

Now in 2016, if that consumer buys that furniture having a displayed price of 105,000 Yen, then he has to pay 108,000 Yen.

Expected after April 2017: 110,000 yen for that same furniture.

Effectively, there would be an increase of 5,000 yen for that same furniture. But in practical things, it won’t work that simply. The manufacturer has to increase the price of that item since he has to increase the salary of his employees. The shop owner needs to increase the price of the furniture as he also needs to increase the salary of his employees. Overall, the buyer may need to pay something around 115,000 yen, which is an increase of 10,000 yen.

For example, an average person, who used to spend something around 300,000 yen per month in 2014, needs to pay 330,000 yen a month for living. His salary might have increased by around 20,000 yen during these periods. For him, there is only one way to adjust his earnings-spending-savings, and that is reducing the spending. The government needs to focus on real causes of economic growth, such as shrinking population and increasing the aging population. 

When the Japanese government increased the consumption tax from 5 percent to 8 percent on April 1, 2014, it was the first hike after seventeen years. The second phase of the hike from 8 percent was expected in October 2015 but delayed. The government stepped up the tax to cover the rising social welfare costs, which is attributed to the aging population in the country. Japan has one of the lowest birth rates in the world, and the recent population survey revealed that the Japanese population has decreased. Japan has the world’s highest ratio of elderly to young people, a fact that raises serious concern about the country’s economic growth.

Americans Reject Sin-Stained Products

Every product or food that passes through the hands of exploited laborers, be it from any part of the globe, will have the wetness of their sufferings. Giving an opportunity to sell those products in the United States is also a kind of encouraging those exploiters. The United States does not want to encourage such exploiters. This is what President Barack Obama did when he signed a bill on this Wednesday that includes a provision banning U.S. imports of some of those products. 

Fish caught by slaves in Southeast Asia, gold mined by children in Africa, and garments sewn by abused women in Bangladesh are just some examples. Child labor and bonded labor are still prevalent in many societies. While the West was successful in eliminating this evil to an appreciable level, many countries in Africa, Asia, and Eastern Europe are still struggling. The profit-hungry owners employ exploited workers, bonded slaves, and children in manufacturing locations. Even in this 21st century, exploitation is continuing. The United States is now closing a loophole in an 85-year-old tariff law that has failed to keep products of forced and child labor out of America.

Exploitation is a social evil still prevalent in our society. In one way or another, a section of society is made submissive in order to subject them to exploitation. American history was not different. Exploitation and discrimination were at their peak in American society. The colonial rulers and their followers had done enough sin to the generations of Native Americans and people from African countries. 

The stains of the slave trade are still visible on the walls. The great thing is that the United States could evolve as a matured society to show or lead other nations. American society was able to correct the mistakes and come out of the sin that was done by their ancestors. U.S. customs law banning imports of items produced by forced or child labor had gone largely unenforced until now. U.S. law allowed importers to buy things regardless of how they were produced. With the new law implemented, importers cannot find the loophole to justify demand by importing products without verifying the origin. 

Legislation all over the world prohibits child labor and exploited labor, but in practice, it is not implemented. Exploited labor has existed to varying extents through most of the history in every civilization. Before World War II, many children worked in agriculture, home-based industries, factories, and the mining industry in countries including Europe and the American continents. The passage of strict laws helped to reduce child labor in Europe and North America, some East Asian countries, etc., but nothing much changed in Africa and South and Southeast Asian countries. High poverty levels and poor school accessibility are said to be some reasons for child labor. However, exploitation, atrocities towards women, and bonded labor are also high in these countries.

The social evil of exploitation of children in the labor market has been reducing globally, thanks to the efforts made by governments and NGOs. Over the past fifty years, child labor has decreased from 25 percent to 10 percent, but still around 168 million children are involved in child labor worldwide, according to UNICEF.

When child labor was common in Europe, certain cultural beliefs rationalized child labor and encouraged it. Many people thought that work is necessary for the character-building and skill development of children. In many cultures parents inherit a particular trade to their children. In those cultures, child labor was a means to learn and practice that trade from a very early age. That is a different side of the story. 

Forced or exploited labor by children is a social evil. In Asian countries such as India, Pakistan, Indonesia, Thailand, and the Philippines, child labor is a serious problem. Macroeconomic causes encouraged widespread child labor across the world for most of human history. They suggest that the causes of child labor include both the demand and the supply side. By rejecting the sin-stained products, the new U.S. law is going to put control on the demand side.

Be Careful When You Bite a Chocolate

BBC reports today that the U.S.-based confectionery company Mars has ordered a recall of their chocolate products in 55 countries after one customer in Germany claimed to have found pieces of plastic in a Snickers bar he bought. The plastic was traced back to the Mars factory in the southern town of Veghel in the Netherlands. As a quick face-saving measure, the confectionery giant decided to call back many of its products. Fun-size Mars, Milky Way bars, and boxes of Celebrations are affected in the UK. In the Netherlands, Mars and Snickers bars were also affected.

The American chocolate company Mars, Incorporated was started in 1932 in Slough, Buckinghamshire, in the United Kingdom. The company has 29 chocolate brands, including M&M's, Galaxy, Twix, Bounty, and Maltesers. It also makes Wrigley gum, Uncle Ben's Rice, Dolmio pasta sauce, and Pedigree pet food. Mars is one of the largest privately owned businesses in the US and had global sales of US$33 billion last year.

Mars chocolates are popular in Japan. It was just two days before we bought a mini packet of MilkyWay brand Mars chocolate produced at their Australian factory. As per reports, the company recalls chocolates mainly from European countries and is not sure at this moment whether Japan is also included in that list. Japan is one of the chocolate-loving countries.

On Valentine's Day, girls and women give chocolates to boys and men in Japan. Valentine's Day in Japan is not limited to lovers. Even children make gift cards to present to their parents and loved ones. Japan had adopted and customized this Western festival to suit their culture. Presenting chocolates to the loved ones is almost a custom in Japan on Valentine's Day. Chocolate sales shoot up in February compared to other months.

Japan is one of the largest consumers of chocolates. Many Japanese people are a kind of addicted to chocolates such as Nestle Mini Kitkat, Pocky from Glico, Bourbon Alfort Mini Chocolate, Lotte Almond Chocolate, Lotte Ghana Milk Chocolate, etc., to mention a few that come to mind. These chocolates are popular and loved and in most demand in Japan. In every supermarket and convenient shops you can see a wide variety of chocolates, showing the demand for chocolate in Japan.

The sales value of chocolate in 2015 was estimated at around US$3.5 billion in Japan. The growth in chocolate consumption in Japan has been supported by the growing awareness about the health benefits of chocolate. There are some scientific research reports stating that the polyphenol in cacao contains a fine balance of minerals, such as calcium, iron, and magnesium, that are effective in reducing blood pressure, preventing arteriosclerosis, and minimizing the level of stress and the effects of allergy and rheumatism. Consumer awareness about the health benefits of chocolate has significantly increased after being promoted by Japanese educational and entertainment television programs.

The recall only involved products manufactured at the Dutch plant. It covers most countries in Europe and does not extend to the US, where Mars is based. Japanese chocolate lovers are watching the steps and damage control measures the company is taking. Japanese consumers are highly quality conscious, and they expect maximum value for their spending, even if it is for a chocolate. For sure, they won't spend to get a plastic bite. Chocolate lovers in Japan too will be careful for a few days while biting chocolate.

Open Defecation is a War Against Society

There was a catchy news story from India about a 104-year-old woman from a village in Chhattisgarh's Dhamtari district who sold her goats to construct toilets at her home. The most amazing thing is that the prime minister of India, Narendra Modi, in a function, touched her feet as a sign of respect.

It must be inspiring news for all Indians. Prime Minister Modi went to the extent of telling the media persons to write about her instead of writing about him. Keep away all the politics; this very act of Prime Minister Modi is really appreciable. We must learn to keep politics away when dealing with the social issues in our country. I may have different political views that may not match with those of the current ruling party in India. That should not limit me from appreciating them when they do good activities. The moment I restrict myself from appreciating good things even if they are done by my political rivals, I think that would be the height of my intolerance.

Real changes are happening in Indian society. The woman's initiative to build toilets encouraged other villagers to follow her, and they also constructed toilets. The Prime Minister felicitated Kunwar Bai from Kotabharri village of Dhamtari for her efforts to make her village open defecation free.

Open defecation is one of the greatest concerns that modern India faces. With almost 40 percent illiteracy, it is hard to educate the importance of cleanliness and hygiene to a majority of Indians. Open defecation is not only limited to the rural areas in India. The busiest financial capital of the country, Mumbai is notorious for people defecating in open air. 

The issue of open defecation may have a direct relation with education and poverty, but it is not the only reason, at least in India. People having enough money also do not give priority to constructing toilets while constructing homes. Because they find that there is an alternative choice to attend the call of nature. Open defecation is a crime against society rather than an individual's right to enjoy the communication with nature.

There is a biased perception in the Western countries, especially about India, that Indians eat in private rooms and defecate in public. I have heard many black jokes about open defecation in India. Some years back, the BBC had reported about combating open defecation in India and the desperate fact that the dedicated groups working to eradicate this social evil are also losing their war.

The southern state of Kerala is one of the most highly educated places in India. Still, open defecation is an issue of concern in rural areas of Kerala. I remember participating in a campaign organized by Sastra Sahitya Parishad (an NGO promoting scientific awareness in the society) during school days to bring awareness to people about the importance of making toilets in their homes. We marched through villages at night, shouting slogans such as "At least one toilet in each home." That movement could raise awareness at least to some people, and we noticed an increasing activity of constructing toilets in our village.

As the prime minister reiterated, the media should concentrate on highlighting the importance of the initiative taken by Kunwar Bai. Media can influence the public to a great extent. They just need to focus on the development of the country rather than just going behind political rivalries and paid news by business corporates. Media do not need to devote full time to social issues but should not neglect them fully. 

Open defecation is a war against society. Open defecation poses a serious threat to society and public health because it can pollute drinking water sources. This pollution may result in the transmission of illnesses like cholera, diarrhea, and dysentery. Studies have proved that human excreta that are infected harbor various harmful organisms linked to multiple health issues. One gram of contaminated human waste can harbor a range of microbes, including 106 pathogenic viruses and infectious virions, 106–108 bacterial pathogens, 103 protozoan cysts, and 10–104 helminth eggs.

We should not lose in the war. The prime minister's initiative to make India clean is the best chance to mobilize all forces to drive away this ignorance and win our war.

Updated Cost of Living for a Family in Tokyo, Japan

“Cost of living in Tokyo” has been one of the blog posts with the maximum number of comments on this site. We have tried to answer many of the queries asked by the visitors. At the same time, we admit our failure to respond in time to many of the queries. That old post about the cost of living was published in 2009. Many of the cost factors have already changed. As a compensation measure, we would like to update the cost of living in Tokyo.

Instead of going on averages, which is practically not very useful and beneficial to you, I will provide some actual figures and nearest real figures wherever applicable. Please note that these figures are for an average  family, living with two children, both attending international school.

- House rent for a 65-square-meter apartment, depending on location, is 110,000 to 185,000 (I pay around 134,000 yen per month). Many companies pay this amount for their employees by making contracts with the housing agencies. Employees do not necessarily know the exact amount in such cases.

- Educational expenses, including school fees and bus fees in an international school, are 125,000 to 300,000 (for two children). School fees depend on the school. My children are going to IISJ, Nishi-Ojima. There are many schools charging more than the amount written here.

- Extra-curricular activities such as karate, dance, music, musical instruments, etc.: 50,000 yen (For karate, we are paying 10,800 yen a month.)

- Electricity bill: 5000 yen normally, but in the winter season it goes up more than 20,000 (The bill I paid this month was 22,695 yen!). Either electricity bill or gas bill goes up during winter season depending on the type of heater.

- Car parking charges depending on where you live: 20,000 yen to 30,000 yen (I pay 26,794 yen a month for parking.)

- Other expenses related to car monthly average: 25,000 yen. This includes petrol. Paid 122 yen per liter. Petrol price is at its low these days.

- Gas bill: 5500 yen (I must admit, this is an average. The bill due for payment is 6683 yen.

- Water bill (once in two months): 10,000 yen. So, 5,000 yen in a month. (The last bill paid was 10456 yen for two months.)

- Land phone with 100 Mbps internet: 7200 yen (Again, depending on the service provider). I use KDDI’s au Hikari service for landline phone and internet. The service provider for the internet is BIGLOBE. My last bill was 7206 yen.

- Mobile phone for self, wife, and two children (kodomo phone for children): 20,000 yen. Here, the things will be different from person to person. I use the mobile phone for both private use and official use. Some of my friends carry two mobile phones, one for personal use and the other for official use, in which case it is easier to talk about the mobile bill for personal use.

- Eating out once a week: 20,000 yen. Usually when we go to chain restaurants or Indian restaurants, the bill will be around 5,000 yen per trip.

- Medical expenses (free for children under 16). Need to pay 30% for adults: 5,000 yen. Highly dependent on what kind of treatment you take. If you and your family members are free of diseases, forget this expense.

- Train commutation expenses (this includes extra travel by family members apart from using a car): approx. 16,000 yen. People usually use a Pasmo or Suica card. I need to pay nearly 600 yen for one day's travel between the office and home. There are many train ticket charging systems, by using which you can save on train expenses. I do not use the train on all the days due to personal reasons. if I use the train and buy a ticket every day or charge the card, the monthly expense would be around 13000. If I charge the card for 6 months, then this would come down to around 10,000 yen per month. Good savings, isn’t it?

- Credit card bills on average (including food items and extra purchases): 140,000 yen

- Flight charges for annual vacation (economy seat and, depending on your country, how far your country is, etc.): 35,000 yen to 45,000 yen per month.

- Unexpected expenses: 20,000 yen

- Birthday parties, get-together: 7,000 yen; again, it highly depends on what kind of life you lead, your preferences, social networks, etc.

I am not going to the extent of summing up the individual expenses, as you can pick up the expenses that you think are applicable to your lifestyle. Once again note that the above figures are for a family (two children, wife, and husband).

Tokyo is a heaven if you are an explorer, and there is no end to such explorations. I do not want to add up those exploration costs to the normal living cost, as such costs purely depend on the type of exploration you do. Depending on your job, you may have to stay with customers or clients longer in restaurants and entertainment places at night, and expenses would shoot up, but such expenses would be usually covered by companies.

You might have some idea about the kind of expenses in Tokyo or in Japan in general. Please use the “Comment box” below to let me know what you think.

Address Change and Contract Termination with Electric Company Before Moving

Call and Inform the Electricity provider well in advance before you move.

One of the things that we need to do in priority while shifting home or moving permanently out of Japan is to call and inform the electricity service provider. I made a telephone call to the Tokyo Electric Power Company (TEPCO) today and informed them about the scheduled moving plan.

I was a bit reluctant to talk in Japanese at first, but the circumstances forced to do so. The moving date is just 2 weeks ahead and can not make any more delay. The phone call went to an electronic receptionist, which started instructing in Japanese to select the desired service. This is a bit cumbersome for foreigners in Japan. I had to repeat the process twice in order to confirm that there was an option for "Hikkoshi". Hikkoshi, 引越しmeans Moving.

After selecting proper numbers, finally the call reached to a live person. I requested the lady at the other end to speak slowly so that I can manage the conversation in Japanese. She asked whether I am the applicant himself or a proxy. I conveyed my requirements and she confirmed my name, address, mobile number and reason for moving. Since it was moving to another apartment, she asked to provide the new address and confirmed that I would use the same mobile number even after moving. (Some people change their mobile number).

When I told the dates of moving in to the new apartment and vacating the current apartment, she asked the date from when the electric connection is required. While vacating the current apartment, all we need to do is switch off the breaker.

Understanding the electronic receptionist's instruction in Japanese and its meaning in English will help you to select proper service.

Remind Yourself Why You were Angry Before You Get Carried Away by it

Japanese economy continued to shrink for the subsequent quarter. For the quarter ended in December 2015, a -0.4% growth was reported. As the news came out, financial analysts and opponents of Abenomics started to sense the end of Government's financial policies. Government led by Prime Minister Abe has been trying to bring inflation to the system by adopting several manipulations that include the latest negative interest rate policy.

While my host country is passing through an economic crisis (at least technically), my mother country is passing through political turmoil. Indian democratic system (in the constitutional sense) is passing through a testing time. It is not because of the present government ruling at the center. This is just a course that every nation has to pass through. The majority of Indian society at the time of independence from British have been just following the democratic principles bestowed on them by their foreign masters. 

Sixty eight years after constitutional independence, Indian democratic system (at least in the constitutional sense) is passing through a testing time. It is not because of the present government ruling at the center. This is just a course that every nation has to pass through. The majority of Indian society at the time of independence from British have been just following the democratic principles bestowed on them by their foreign masters. 68 years after constitutional independence, majority of our citizens are not aware of the difference between foreign and their new local masters.

Feudal system still exists in many parts of our India. For us, the newly bestowed freedom has been like a toy in the hands of monkeys. If we do an introspection, we can sincerely say that a vast majority of our population is not matured to observe self-discipline or self-governance. They do not need the kind of freedom that constitution endows them when they find joy in the captivity: the captivity of superstition, the captivity of tribal rituals, the captivity of reinforced beliefs and captivity of caste system. An average Indian even in this age is happy to be identified as Brahmin, Shudra, Kshatriya or Vaishya rather than just a human being. A majority of us, Indians are happy to get ruled by others. This is where the progressive movements in India failed. The irony of progressive movements in India is that their leaders put their legs in Russia, Cuba or China to define problems of Indian society. They had no faith in Indian people, rather they were in an illusion with the peasant revolutions that happened in European countries centuries ago.

Civilizations in western world had passed through regimes ruled by majority, where interests of minorities and opponents were dealt with iron fist. They had already passed through that phase years ago. We are just passing through it and for some other civilizations, it may take some more years. Proponents of progressive ideas need to concentrate on issues related to caste system, discrimination based on gender, superstitions, to mention a few of the social evils prevalent in Indian society rather than targeting political leadership, for bringing foreign investments to the country.

Coming back to the reality, for many Indians living in developed countries, the news from their homeland is disgusting (at a time when we need to concentrate on domestic production and development, the political energy is diverted towards conflicts). Then, are these conflicts purposely created? Whose interest is it to create anarchy in India? Whose interest is it to create an emergency like situation in India? Readers from India know the answers to these questions.

Freedom is not a license to utter rubbish. Neither it should be a license to arm against your country nor a license to silence your opponents. There is an upsurge of policing by the supporters of the ruling party workers all over the country. This could be attributed to the sudden excitement of the majority of seats won by the party. Electing a party with majority does not automatically empower the party to do all kind of controlling activities in the society. Their excited activities helped only to create an image of terrorism, which in the hands of political opponents has become a tool now.

The whole idea of power shift has forgotten now. The man who brought the power shift in Indian political horizon has been subsided by some of his so called ignorant supporters. In fact, they are tarnishing his image by creating opportunities enough to sink the whole idea of development in the country. Development in every sphere of life is what India needs to survive and come up as a successful society. A man alone at the political leadership is not enough to bring such a big change.

Then again, freedom of speech is not your right to invite your enemies to destroy your home. Boys, grow up and learn first how to protect your feet, then you can think of energizing and glorifying our enemies. Your enmity towards the ruling communal party and its ideologies should not convert in to hatred towards your mother country. You need to remind yourself why you were angry, before being carried away by that devilish emotion.