Two years after its introduction, Abenomics is yet to benefit all Japanese
Some sectors of the economy are doing well out of the Japanese PM's flagship policy
But rising prices mean that not all Japanese are fans of the policy
Abe is painting the impending general election as a referendum on Abenomics
Two years after Japan’s Prime Minister Shinzo Abe unveiled his plan to finally break the country’s economy free from more than 20 years of under-performance, the much-hoped-for renaissance has not filtered down to everyone.
Standing near a 100-meter long queue for lottery tickets in Tokyo’s wealthy Ginza district, 34-year-old nurse Mihoko Aoki is still waiting for proof that it is working.
“I hear that Abenomics is bringing merit to big companies, but for small companies like my husband’s one, there is no benefit,” she says.
“And for me as a nurse there are no benefits either.”
There are changes but, for her, not good ones. She notes that the price of food has gone “up and up” over the past year and that life for her is starting to get tight.
“I wish that Abenomics would bring my quality of life up, because at the moment it’s just the rich people who are getting the benefits.”
A 78-year-old man standing nearby, who would only give his name as Mr. Hirano, agreed. “They say that employment is getting better, but all I see is the price of things going up, and that is hurting me.”
But rising prices is actually one of the key targets of Abenomics. After more than a decade of deflation, where prices fell and consumers held back from spending in the hope they would fall further, a combination of pumping money through the system and cutting the value of the yen which makes imports more expensive, is having the desired affect.
Japanese are getting out and spending more and prices are rising. Or at least they were – until a new consumption tax was introduced in April which not only stopped spending in its tracks, but sent the economy into recession.
To be fair, the tax was a hangover from a previous government, but Abe’s Liberal Democratic Party did support it.
But there are still plenty of winners from Abenomics.
Shuhei Yeda is a 37-year-old construction company employee. He says that his salary is up 3% this year and he is now getting fat bonuses as a result of the government-backed boom in construction.
“I am getting a big boost from Abenomics. We don’t have enough people for all the work,” he says.
Certainly, the unemployment rate in Japan is the envy of the developed world at under 3%. Companies are on a hiring spree as the yen weakens and exports become more competitive. At home, the service industry is also booming.
According to JP Morgan’s managing director and head of research, Jesper Koll, 130,000 jobs a month have been created since Abenomics kicked off.
“The key issue is whether the economy is creating jobs, and the answer is absolutely yes. On top of that you have corporates making more money, they have basically doubled, so you have employment up and profit up and consumer sentiment on the rise.”
But there are still plenty of Japanese who are not a part of this picture. And they are they people that Abe needs to convince if he is to stay in power.