Let's Japan.org Debunking Eikaiwa and Ramblings in Japan

With Rakuten and Fast Retailing making English the first language in their offices, the Daily Yomiuri Online says that it has given English conversation schools a much needed boost:

During the April-June period, Berlitz Japan, Inc., an operator of foreign language schools, saw the number of its corporate customers and individual regular students who are company employees jump 50 percent from a year earlier. Its summer short program also has attracted about 2-1/2 times as many students as in the previous year.

Another English school operator, Gaba Corp., enjoyed a similar boost, with corporate contracts up 12 percent year on year in the first half of 2010.

Well, that's good news for two schools, but what about the rest? The article notes that Fast Retailing plans on hiring non-Japanese staff. If they can already speak English, then it won't translate into new business for the eikaiwas. So, are things looking good in eikaiwa or is this article seeing things through rose-colored glasses?

The Liberal Democratic Party (LDP) of Japan is an institution. The party had controlled the government of Japan for fifty years, relatively uninterrupted. However, with a bitter defeat in last year's election by the Democratic Party of Japan (DPJ), the once long serving party is in transition. The Liberal Democrats will not be returning to power, unless they restructure internally and provide some direction for the country.

The LDP had been guiding Japan's economy and foreign policy with a tried, tested and true philosophy that collapsed with the global economy a few years back, and most recently led to the embarrassing defeat in last summer's House of Representatives election. The loss was more of a referendum on the LDP leadership and ruling mentality, than it was a vote of confidence in the DPJ's ability. With voters disenfranchised, the polling numbers were drastically low, in an election that would re-shape the Japanese economy and global outlook. Voter turnout was estimated at roughly 50% in the election, but strong weather conditions and swine-flu (N1H1) apparently also kept voters from turning up. (1)

After so long, what went wrong for the Liberal Democrats?

Domestically, many news sources have attributed the fall of the LDP to the economic troubles that have recently rocked so many economies. This is no doubt a major factor in the defeat of the LDP. However, another reason that is less apparent was also at work when voters decided to hand the reigns to anyone other than the LDP. The Liberal Democrats had become a legacy party with a sense of entitlement, offering very few fresh ideas and little or no convincing arguments as to how they should, or even why they should fix the problems that had developed under their leadership. Rather, it was not only the economic plunges of the past few years that doomed the LDP, but it was also the lack of vision that the party displayed.

Kazuo Inamori, founder of Kyocera Corp, made the argument against Japan's virtual one party leadership in an October interview. Inamori believes that healthy debate and a government that shifts between parties is essential as Japan moves forward in the coming decade. "If government mismanagement provoked sharp criticism from the public and led to changes in power, political parties would naturally be imbued with a sense of tension, recognizing that only by delivering good government could they continue to rule."(2)

Current LDP President Sadakazu Tanigaki has to truly lead his party into a new era, in order to reaffirm the Liberal Democrats place as the institutional government of Japan. The recreation and transformation into a new and healthy party will take time and effort on the part of the LDP senior leadership. The party does have one strong advantage; they have the know-how and experience to govern. According to today's Japan Times, "Tanigaki has launched a council within the LDP to redefine the party's political ideals and devise strategies to retake power from the DPJ-led coalition." (3)

It is yet to be seen if this council can reshape the party or the policies in any meaningful way. There is serious doubt that the new party will be anything different than the same old Liberal Democrats in new clothes. The party needs to go shopping in the private sector and attract a few stars to the fold. It also needs to learn tough lessons from their only major source of competition, the DPJ. One such lesson is to take an increased interest in the Asian community and to continue to develop and foster closer relations with China. The future success of the LDP heavily rests on their ability to promote a few fresh ideas while balancing this change with the policies that have made them a success in the past. In the past the LDP has been conceived as a fairly good financial steward and must principally regain this perception. As a few fresh ideas, they could offer increased funding of Japanese defence and ring the patriotic bell, they could focus on popular environmental issues, diplomatically, they could support increasing relations with China and South Korea.

(1) http://news.bbc.co.uk/2/hi/8228278.stm
(2) The Statement as written appears in Inamori, Kazuo. "Finally, a True Change of Government." Japan Echo Dec. 2009: pg. 11. The original Japanese version apparently comes from "Hatoyama Minshu yo, katte kabuto no o o shimeyo," Bungei Shunju, October 2009, pp.106-113.
(3) "LDP stumbles along the comeback trail." The Japan Times 9 Jan. 2010: A3.

The eco-point program is now officially underway with the government accepting applications:

Under the Eco-point system, those who buy designated energy-saving appliances between May 15 and March 31 will be eligible for the points, with one Eco-point worth roughly ¥1.

Points given vary between 6,000 and 9,000 for air conditioners, depending on cooling power, 3,000 and 10,000 for refrigerators depending on capacity and 7,000 and 36,000 for televisions for terrestrial broadcasting depending on the size of screen.

Starting Wednesday, purchasers of these appliances may register Eco-points by mailing applications along with documents such as receipts and copies of product warranties to the Eco-point secretariat. These points may be exchanged for merchandise coupons, electronic money and other items of choice.

For instance, 13,500 Eco-points may be exchanged for ¥12,000 stored in a Suica electronic money card issued by East Japan Railway Co., while 5,000 points are exchangeable for ¥5,000 worth of department store coupons.

So, how can I help the environment by purchasing newer appliances? This is how the points are awarded for refrigerators and TVs:

• Refrigerators
  • 501L or more: 10,000
  • 401L to 500L: 9,000
  • 251Lto 400L: 6,000
  • 250 or less: 3,000
• Digital terrestrial TVs (LCD and plasma)
  • 46-inch or larger: 36,000
  • 40 to 42 inch: 23,000
  • 37-inch: 17,000
  • 26 to 32-inch: 12,000
  • 26-inch or smaller: 7,000

The list of refrigerators eligible for the eco-points program is here [PDF]. TVs are here [PDF].

Note: The links to the lists of eligible appliances seem to have died. They were working a few days ago, but somebody seems to have removed them from this page on the eco-point website.

I currently own a 28-inch Sony TV that is rated at 125W and a 401L Hitachi refrigerator rated at 140W, or 260kWhr/year. Both are 6 years old and in good working order. I want to maximize my points, so that means buying a larger TV and fridge.

Let's go for a Sony 52-inch KDL-52X5050. According to Sony, it consumes 315W, more than double the consumption of my current TV. How about a 46-inch Sharp LC-46AE6? 150 watts. A 40-inch Sharp LC-40AE6? 120W, so I'm better off in terms of consumption, plus I end up with a larger screen although I'm going to have to pay over 100,000 yen for it.

The same goes for refrigerators. The one I have has consumes 260kWhr/year. Let's look at the Hitachi R-SF50YM, which has a capacity of 501L. It consumes approximately 400 kWh/year. How about Panasonic's 470L NR-F473TM? It consumes roughly 390kWh/year. A quick look at the offerings from Panasonic and Hitachi shows that I need to buy a significantly smaller refrigerator if I'm to reduce my energy consumption.

Can you reduce your energy consumption by upgrading to newer appliances? Yes, but only if you pay attention. But when was the last time you thought about power consumption when shopping for an appliance? Sadly, the way the eco-point scheme is structured, consumers are "rewarded" for purchasing larger and more expensive appliances, which also consume more electricity. If you fall into the trap of maximizing your eco-points, you will likely increase your overall electricity consumption instead of reduce it. As I said before, like the 12,000 yen kickback, it's a ploy to boost consumption in the short term under the guise of "being green."

In the forums, Inflames provides a link to a G.communication PDF. It seems that they have decided to rent out space at its Yaesu school. There's nothing unusual about this as businesses look for ways to generate revenue during the economic collapse. I've heard about parts manufacturers making confectioneries to help make ends meet. Still, it suggests that business isn't very good at the Yaesu school.

Let's back up a bit to March 2008:

YAESU NOVA

Well, not surprising, the opening of the YAESU school today was a complete bomb! They had a total of about 7 calls and hardly any visitors. There are plans to open new schools in Shibuya, Shinjuku and Ginza next. One has to wonder if they'll get the word out for those schools.

Now, fast forward to the present:

The reason for this is that Yaesu has now become a HALF DAY school. Its only open from 5-9, Monday-Friday. It used to be a regular school. I worked there for six months, up until the end of last year almost, but then got the forced transfer BS and was told to move - as have other instructors, due to the reduced operating hours.

It doesnt surprise me now that they have to rent out the rooms - probably just to cover the rent. My understanding is that now ALL of the instructors that teach there are newbies, who came after the collapse and received the Mickey Mouse, lecture-style training by Mr.Smiley and crew. Some received actual training, basically like OJT (especially last year, cuz we had training every couple weeks and I was doing Obs for pretty much the whole six months I was there). At the time I was there, however, and shortly thereafter, the instructors (myself included) pulled through the bankruptcy and had gone through Old Novas system of training (again, nothing amazing, but more comprehensive than what most have received following the collapse), and were used to the textbooks, the lessons, etc.. Even instructors that were relatively new (started with Neo-nova) were working with seasoned instructors and could receive tips/advice if they wanted it.

The flyer is straightforward: the Yaesu school has space for rent. Says the first ad:

1. 2 minutes from the Yaesu Exit
2. So close, you can catch your (bullet) train with seconds to spare
3. No other businesses next to the school. Nice and quiet
4. Close to izakayas, so you can head out for a drink after your meeting
5. Same-day reservations available

There are four rooms (1 ten-person and 3 six-person rooms) with videophone booths, white boards, and access to washroom. The 6-person room rents for ¥3000/hour while the larger room goes for ¥4500/hour.

The second ad is more of the same, but with an added touch of humor. This time, instead of a meeting room, G. com is renting out "private offices" which suspiciously resemble the meeting rooms, for the low price of ¥500/hour. Again, the 5 merits of their service:

1. 2 minutes from the Yaesu Exit
2. So close, you can catch your (bullet) train with seconds to spare
3. No other businesses next to the school. Nice and quiet
4. Large desks for efficient work
5. It's cheap

The hilarity is in the two text boxes in the bottom right corner.

The top one says, "All you can drink coffee" and the bottom one, "OK to ask foreigners questions after 5:00 P.M." How demoralizing. Instead of giving lessons, instructors will be expected to entertain users and their endless parade of hits such as, Do you know Ichiro? How long you Japan? and the timeless classic, Can you eat Japanese food? Why not just turn the school into a host/ess bar and be done with it?

I wonder if there's a catch here. ¥500 for the first hour and ¥400 for every subsequent hour is really cheap, and I don't see how that covers costs unless all of the offices are used. Will users have to sit through a sales pitch for lessons? Does G.Com hope that people will magically sign up after renting their rooms? Moreover, what's to stop someone from using this service as an eikaiwa? Would a businessman be able to snag an instructor and have him correct or edit some correspondence?

Like the parts manufacturers forced to make candy, G.Com's attempt at converting the school into a meeting space is delaying the inevitable. If you can't make a go of your primary business, it's time to think about closing the school or downsizing it, and accept the fact that it will never be very busy or profitable.

A propos my comment on now being a bad time to come to Japan, an example of how the economic meltdown affects English teachers:

Though many municipalities plan to employ native English speakers or bilingual people to teach public primary schools' fifth- and sixth-grade students' English classes in April, a recent Yomiuri Shimbun survey showed that some cash-strapped municipalities are reluctant to do so for financial reasons.

[...]

However, some cash-strapped municipalities have no prospect of employing assistant language teachers. Yamagata Prefecture's Shinjo municipal government, which is required by the Internal Affairs and Communications Ministry to reconstruct its finances, has scheduled 15 or more English classes at its 10 primary schools, but has no plans to employ assistant language teachers.

"We had to put priority on measures to strengthen the earthquake-resistance of school buildings, which is more urgent," an official of the Shinjo municipal board of education said.

The Okushiricho town government in Hokkaido has not considered employing assistant teachers. It plans to hold 35 English classes in fiscal 2009, but the classes will be taught by Japanese teachers.

It's also bad for foreign students:

According to the Japan Student Services Organization (JASSO), the number of foreign students studying in Japan at universities, graduate schools and junior colleges has been on the rise in recent years. As of May 1 last year, a record 123,829 foreign students were studying in Japan, up 5,331 from the previous year. About 60 percent of the foreign students came from China, followed by students from South Korea, Taiwan and Vietnam, according to JASSO.

Many students from Asia hope to work in Japan. However, only 10,262 students were able to obtain working visas in 2007 after finding jobs. Many students ended up returning to their home countries after failing to find work.

The employment situation for foreign students has gone from bad to worse due to the economic downturn. According to the Tokyo Employment Service Center for Foreigners--a job-placement office for foreign residents--there were 252 job listings targeting foreign students graduating in March available at the center as of Jan. 31, down 54 from the same period last year.

According to the organization, it is mainly small and medium-size companies that seek employees through the center. However, general manager Kazuo Hirasawa said companies across the spectrum are cutting the number of foreign students they hire.

And it's terrible if you happen to be a nikkei Brazilian worker. The Japanese government would like you to leave:

Japan is offering $3,000 for a plane ticket home to some foreigners who have lost their jobs, a sign of just how bad the economic slump has gotten.

The program, which began Wednesday, applies only to several hundred thousand South Americans of Japanese descent on special visas for factory work. The government's motivation appears to be three-fold: help the workers get home, ease pressure on the domestic labor market and potentially get thousands of people off the unemployment rolls.

"The program is to respond to a growing social problem," said Hiroshi Yamashita, an official at the Ministry of Health, Labor and Welfare, referring to joblessness, which has climbed to a three-year high of 4.4 percent.

As Japan's economy began to meltdown last year, the Japan Times ran a couple of articles detailing how people were coping. One article was about a surge in the sales of bicycles while another noted how more and more people were turning to car-sharing as an alternative to owning a car.

Cycling back in fashion:

While automakers are suffering from slumping sales amid the global economic downturn and accelerating efforts to develop green cars to spur new demand, the traditional green vehicle — the bicycle — is becoming more popular.

"Usually, bicycles sell well in the high season of summer and business is slow when it gets colder, but this year we have remained very busy," said Daisuke Nishikoori, manager of the Y's Road bicycle chain's outlet in Tokyo's Ikebukuro district.

Consumers' growing awareness of health issues and the surge in gasoline prices to record levels in 2008 have increased bicycles' appeal, while a wider variety of lineups and fashionable outfits for cycling have attracted more people, he said.

At Nishikoori's store, imported sports bicycles, some of which cost more than ¥100,000, are selling well, as more retired men take to cycling as a hobby, he said. More customers are also becoming interested in commuting by bicycle, he added.

A Japan Bicycle Promotion Institute poll of 100 designated retailers nationwide showed sales of sports bikes had double-digit or sometimes triple-digit percentage growth rates every month through last November compared with year-earlier levels.

Car-sharing:

Car-sharing is shifting into a higher gear as people try to save on vehicle maintenance costs and reduce their carbon footprint.

Some people who have joined car-sharing plans have sold their cars.

"I used to only use my car on weekends, and increasingly thought that was a waste," a 35-year-old Tokyo woman said. "After discovering that the condominium complex where I moved has a car-sharing service, I decided to get rid of my car."

There's nothing remarkable about these practical responses to the economic downturn, unless you happen to be a car manufacturer:

To get around the city, Yutaka Makino hops on his skateboard or takes the trains. Does he dream of the day when he owns his own car? Not a chance.

Like many Japanese of his generation, the 28-year-old musician and part-time maintenance worker says owning a car is more trouble than it's worth, especially in a congested city where monthly parking runs as much as ¥30,000 ($330), and gas costs about ¥100 a liter (about $3.50 a gallon).

That kind of thinking — which has been dubbed by automakers as "kuruma banare," or "demotorization" — represents a U-turn from the thinking of earlier generations of Japanese who viewed cars as status symbols. The trend is worrying auto executives who fear the nation's love affair with automobiles is coming to an end.

Suddenly, "that kind of thinking" is threatening to business, and the Yutaka Makinos of the world are putting the economy in peril:

Unlike other industrialized nations, there is a lack of other powerful sectors to drive the economy, such as financials and services. Consumer spending makes up about 60 percent of GDP.

The damage caused by a declining auto industry would be devastating because so many jobs would be affected — not only at plants but as parts makers, distributors and other companies, including those that make electronics, batteries and other products for the industry.

Already, automakers here have shed thousands of jobs at plants that have been producing cars for overseas markets with a bigger thirst for autos. Toyota is projecting its first operating loss in 70 years.

This same kind of reporting that equates the lack of consumption with the collapse of the economy also appeared in a recent New York Times article:

The economic malaise that plagued Japan from the 1990s until the early 2000s brought stunted wages and depressed stock prices, turning free-spending consumers into misers and making them dead weight on Japan’s economy.

Today, years after the recovery, even well-off Japanese households use old bath water to do laundry, a popular way to save on utility bills. Sales of whiskey, the favorite drink among moneyed Tokyoites in the booming ’80s, have fallen to a fifth of their peak. And the nation is losing interest in cars; sales have fallen by half since 1990.

The Takigasaki family in the Tokyo suburb of Nakano goes further to save a yen or two. Although the family has a comfortable nest egg, Hiroko Takigasaki carefully rations her vegetables. When she goes through too many in a given week, she reverts to her cost-saving standby: cabbage stew.

“You can make almost anything with some cabbage, and perhaps some potato,” says Mrs. Takigasaki, 49, who works part time at a home for people with disabilities.

Her husband has a well-paying job with the electronics giant Fujitsu, but “I don’t know when the ax will drop,” she says. “Really, we need to save much, much more.”

Japan eventually pulled itself out of the Lost Decade of the 1990s, thanks in part to a boom in exports to the United States and China. But even as the economy expanded, shell-shocked consumers refused to spend. Between 2001 and 2007, per-capita consumer spending rose only 0.2 percent.

Now, as exports dry up amid a worldwide collapse in demand, Japan’s economy is in free-fall because it cannot rely on domestic consumption to pick up the slack.

The same story in the Star Tribune carries it a bit further with the headline: As Japan shows, thrifty isn't always a good thing.

What kind of bizarro world do we live in? It's the fault of consumers that the economy is in free fall? If you spend, you're good; if you save, you're bad. Apparently, the public is supposed to go on a spending spree like there's no tomorrow.

While the Takigasakis are doing their best to ruin Japan, the New York Times also fingered the following people as further examples of Japan's doom:

Young Japanese women even seem to be losing their once- insatiable thirst for foreign fashion. Louis Vuitton, for example, reported a 10 percent drop in its sales in Japan in 2008.

“I’m not interested in big spending,” says Risa Masaki, 20, a college student in Tokyo and a neighbor of the Takigasakis. “I just want a humble life.”

The sky is falling! How will Japan's young'uns live without designer bags?

Japan’s aging population is not helping consumption. Businesses had hoped that baby boomers — the generation that reaped the benefits of Japan’s postwar breakneck economic growth — would splurge their lifetime savings upon retirement, which began en masse in 2007. But that has not happened at the scale that companies had hoped.

Curse those tight-fisted old people. It's as if they've experienced a depression before. They should really be out there splurging.

Hiromi Kobayashi, 38, a Tokyo homemaker, has taken to sewing children’s ballet clothes at home to supplement income from her husband’s job at a movie distribution company. The family has not gone on vacation in two years and still watches a cathode-ray tube TV. Mrs. Kobayashi has her eye on a flat-panel TV but is holding off.

“I’m going to find a bargain, then wait until it gets even cheaper,” she says.

A pox on you, Hiromi, for not getting with the program and throwing out your perfectly good TV.

All of these examples of bad consumption, however, are examples of discretionary spending. If Japan's economic salvation lies in designer handbags, spending-sprees by the elderly, and flat-screen TVs, there's not much hope for the nation. The NYT chooses to focus on the lack of consumption while downplaying the role of companies, who have effectively sown the seeds of their own destruction by unraveling job security and cutting costs by switching to cheap labor. Their policies have produced families like the Takigasakis and individuals like Yutaka Makino.

The Takigasakis don't appear to be hurting for money, but fears about job security have forced them to be careful about their spending. On the other hand, Yutaka Makino, in the Japan Times story, doesn't have much money to begin with. He's a part-time worker, probably on a contract that may not be renewed when it expires, and lives in an apartment full of wooden crates. His low income guarantees that he will not be buying big ticket items like a new car.

It should come as no surprise that people would change their behavior in a crisis. The switches to bicycles, car-sharing, and general lack of discretionary spending isn't necessarily the result of people ditching cars to protect the environment. Being thrifty is called living within your means, which is what people do in order to get through difficult times.

Circumstances have compelled people to change their consumption patterns and how they live. Unfortunately, leaders around the world are hooked on consumption and perpetual economic growth like crack junkies. Even though the financial banking system has imploded, they are furiously trying to kick start the system that resulted in the collapse in the first place. It never occurs to them that the public has already reacted to the crisis by reorganizing the activities of daily life. Instead, governments are trying to drag everyone back into sustaining the unsustainable. Ratcheting up consumerism isn't a solution. Given Japan's depressed consumption patterns for the past decade or more and its rapidly aging society, I don't think it could boost consumption if it wanted to.