Japan's consumers offer little help in easing nation's export imbalance
The Japanese consumer obviously hasn't read the government-written script. The official scenario for the past two years has called for an upsurge in consumer spending to reduce the economy's dependence on exports for most of the annual growth. So far, that has not happened.
But government economists remain undaunted by public refusal to loosen the household purse strings. The old script has been dusted off again and is being presented as the game plan for fiscal 1982, beginning April 1.
The business community, the unions, and private economic analysts are adamant that there is no basis for this persistence. Although the Japanese economy looks healthy when viewed from abroad, the average household here, in fact, has less to spend in real terms than five years ago.
The economic boom of much of the 1960s and '70s satisfied virtually everyone's material desires, the experts say. There is now a switch in emphasis from ''material to mental affluence,'' they say.
And any lingering desires to splurge on nonessentials is quickly cooled off by two facts of economic life: inflation and higher taxes.
One reason the Japanese government is so interested in sparking consumer spending is to ease trade friction with the United States and Europe. Because the domestic economy is in the doldrums, businesses in the past two years have had to seek their profits, and often survival, in overseas markets. The result has been record trade surpluses as exports balloon and imports shrink.
The Japanese say that they can't afford to cut exports but that the situation would be better if American and European companies sold more in the Japanese market.
This would be a good strategy if people were prepared to buy. The fact that they are not threatens to undermine every promise Prime Minister Zenko Suzuki makes to Washington that the trade gap will shrink in the months ahead. His assurances are based on a government plan for economic growth of 5.2 percent, including 3.8 percent more consumer spending.
As each Japanese buys more (so the theory goes), businessmen will feel more confident about new capital investment, further expanding demand, and depending more on sales in the local market than in the US. A byproduct of this should be more demand for American products.
It is a well-worn theme. For fiscal 1981, for example, the Economic Planning Agency (EPA) originally predicted at least 4.1 percent growth in personal spending. Lately, however, the agency has been quietly talking about 1.8 percent.
Most private economists say available statistics indicate the increase will be about the same as last year (0.7 percent), far too little to have any effect on the troublesome trade imbalance.
The basic problem is smaller pay packets. It is a vicious circle, with a domestic business slowdown being prolonged by the average worker refusing to spend - because his wages are lower, owing to the slowdown.
Nominally, income of a typical worker family of four has gone up 30 percent in the past five years. In fact, the Finance Ministry says real disposable income is declining.
Behind the decline is a heavier tax burden. Each wage rise brings more and more poor families into the tax fold, while the more affluent find themselves being pushed into a higher tax bracket. The ratio of taxes to national income rose from 19.3 percent in 1976 to 24.2 percent in 1981.
The impact on the economy is visible: fewer people traveling over the recent new year holidays; motorists buying new cars less often; manufacturers devising more ways to unload unwanted products so that assembly lines keep turning (even at a loss).
Labor federations are pushing for a 9 percent wage increase this year, while management says 6 percent will be the maximum available - about the same as last year.
But both sides insist consumer spending will never increase unless the government slashes taxes. This has already been rejected by Mr. Suzuki, who needs the revenue to meet a commitment to end chronic budgetary deficits having to be papered over each year with government bond issues.