Global finance: 7 money lessons from Japan
In the second part of our series on financial habits from around the globe, we look to Japan to learn some important money lessons.
Britain has had a diverse range of financial policies and proposals: some good, others terrible (we're looking at you, Poll Tax).
Perhaps we could take a few tips from someone else’s book.
In the second of our series of Money Lessons from Around the World (you can read part one here), we jet to Japan to explore what those in the Far East can teach us.
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You can design banknotes for blind and partially sighted people
Japanese banknotes have raised bumps on the bottom corner of their yen notes so that blind and partially sighted can distinguish between different notes.
Something we can consider for the next round of polymer notes?
Banning gambling doesn't stop addiction
Gambling for cash is illegal in Japan, with the exception of sports, the lottery and an arcade game called Pachinko.
Pachinko is the equivalent to western slot machines – the player launches one ball at a time onto the Pachinko board and the aim is to get three matching symbols on the slot machine.
Japan is the only developed country in the world where the casino industry is illegal. However, addiction has struck many Japanese people already.
According to the Japan Times, more than five million people (5% of the adult population) in Japan are addicted to gambling.
This is higher than most other countries where the issue affects about 1% of the total population. It’s thought to be fuelled by Pachinko parlours, with passers-by commonly hearing a ‘ding-ding-ding’ sound when they wander past one.
Figures from Statista show that, despite gambling being outlawed in Japan, it ranks third on the table of countries with the biggest annual gambling losses.
It comes in behind the US (£114.3 billion) and China (£76.5 billion) at £23.8 billion.
Tipping suggests staff aren't paid enough
Far from being a reward in Japan, tipping is actually seen as a little insulting. It may even imply that you don’t think staff earn a fair wage.
Everything is covered by the quoted price so there’s a chance you’ll be chased down the street with your money if you try and leave a tip.
The culture doesn’t just stay in Japan either - at Tokyo Diner in London they explicitly ask you not to tip and any extra money will be given to the local homeless shelter.
New York-based Japanese restaurant Riki Restaurant recently decided to eliminate tipping and raised its menu prices to pay staff higher wages.
Should we do away with tips entirely? Supporters of the idea say customers shouldn’t be expected to supplement poor wages.
Taxing rich emigrants has its problems
In July 2015, the Government introduced a departure tax to the rich. Financial assets of JPY 100 million or more in aggregate value would be subject to a 20.4% Capital Gains Tax.
It’s designed to prevent wealthy foreign nationals from moving to a new country where tax is lower and they could sell financial assets with little or no financial penalty.
The number of people doing this is small at the moment, but it’s growing.
If you’re a short-term resident who’s lived in Japan for fewer than five out of the last 10 years, you’ll be spared the tax. Any longer than that and you’re considered a permanent tax resident.
The problem here is that some residents would be taxed twice – once for leaving Japan and once for entering their next destination – which is seen as unfair.
Though the policy is still new, experts think that the tax would discourage foreigners from working in Japan, stifling the country's economic stimulation plan.
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Fines for being fat reduces obesity
Once you hit 40 in Japan the rules become much stricter. Under metabo law, employees will have their waist measured and if it’s above 33.5 inches for men or 35.4 inches for women aged between 40 and 74, their company will be fined.
The guidelines are arguably a bit simplistic, but it gets results – in Japan only 3.5% of the population are classified as obese.
More than a quarter of the population is over 65 so this figure (and presumably their figures!) are pretty impressive.
Workers whose waists are too large are forced to go to counselling and support sessions.
Though health ministry figures show that less than half of those who are meant to undergo exams do.
The Japanese are generally in pretty good shape. Is it down to a healthier lifestyle among the population or has the metabo law had a significant impact?
Companies who overwork their staff need to be punished
‘Karoshi’, or death by overwork, is a widespread issue across Japan. It's mostly cardiovascular disease or suicide caused by stress from working excessive hours.
The Government defines karoshi as working 100 or more hours of overtime in the month before their death or 80 hours of overtime at least two consecutive months during the previous six months.
As for suicide, a victim's family can claim compensation for karoshi if they worked at least 160 hours of overtime in a month, or more than 100 hours of overtime for three months in a row.
The increase in families demanding payouts in recent years can be costly for the family in terms of legal fees and costly for businesses in terms of forking out for damages.
Compensation cases for karoshi rose to a record high of 1,456 in the year ending March 2015 with more cases in healthcare, social services, shipping and construction, all of which are facing chronic worker shortages.
If karoshi is found to be the cause of death, families can get huges sums from the company in compensation.
The operator of major restaurant chain Watami, was forced to shell out Y130 million (£820,000) to the family of Mina Mori (26), who killed herself because of overwork.
It also affects finances if a family loses its main breadwinner.
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Increasing VAT can be a bad idea
As part of his Abenomics economic stimulation plan, Abe planned two rises to VAT to close the gap between GDP and Japan’s sizeable national debt. One was planned for 2014 and the other for 2017.
An increase in VAT from 5% to 8% in 2014 has made Japanese shoppers more reluctant to get out there and spend, which has a damaging effect on the economy.
The second increase has been delayed from 2017 to 2019 because of the predicted harm it’ll do to household spending which has already decreased by 5% since 2014.
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