Core Viewpoint - The article discusses how Japan managed to avoid a significant decline in the middle class during its "lost three decades" despite economic stagnation and rising inequality, providing insights for other societies facing similar challenges [1][2]. Economic Context - Japan's average annual income decreased from approximately 4.63 million yen in 1990 to 4.33 million yen in 2018, indicating stagnation in nominal wages and a decline in real income due to inflation [1][3]. - The relative poverty rate rose from about 10% in the 1980s to 16% in 2012, ranking Japan second among G7 countries in terms of income inequality [3][4]. Consumption Patterns - The Engel coefficient, which measures the proportion of food expenditure in total consumption, increased from around 20% in the late 1980s to 26.6% in 2022, reflecting a decline in disposable income and a shift towards essential spending [3][4]. - The perception of being middle class in Japan remained relatively stable, with self-identification as middle class only slightly declining from 90% in 1990 to 89% in 2024 [4][5]. Social Stability - Despite economic challenges, Japan maintained a stable social structure, with the net Gini coefficient remaining around 0.38 over 30 years due to effective social redistribution mechanisms [7][8]. - Social security spending accounted for 25.12% of GDP in 2023, supporting a comprehensive welfare system that includes various insurance programs and cash subsidies [8][9]. Consumer Behavior - The rise of affordable brands like Uniqlo and Muji during Japan's economic downturn exemplifies "defensive consumption," allowing families to maintain a decent standard of living despite reduced spending power [11][12]. - Japanese companies focus on efficiency through management philosophies like Kaizen and Just-in-Time, which emphasize waste reduction and responsive production without compromising quality [12][13]. Cultural Factors - Japan's societal norms emphasize reputation and reliability, leading to a culture where businesses prioritize quality and service over merely competing on price [15][16]. - The concept of "cooperative fulfillment" reflects a societal commitment to maintaining standards and mutual respect, which has helped Japan navigate economic difficulties without severe social fragmentation [15][17].

Group 1 - The "Lost Thirty Years" in Japan refers to a period of economic stagnation following the bubble burst, characterized by stagnant nominal wages and declining real income [1][2] - The proportion of non-regular employment has increased significantly, with over half of women and more than 20% of men in non-regular jobs by 2020, leading to a perception among the younger generation that effort does not guarantee reward [1][2] - The relative poverty rate in Japan rose from about 10% in the 1980s to 16% in 2012, ranking second among G7 countries, indicating a shrinking middle class and increasing low-income households [2][3] Group 2 - The pension replacement rate in Japan has declined from approximately 68% in 1986 to 61.7% in 2019, indicating a growing challenge for the middle class as the aging population increases [3][4] - Despite economic challenges, the self-identified middle class in Japan has remained relatively stable, with a slight decrease from 90% to 89% from 1990 to 2024 [3][4] Group 3 - Japan's Gini coefficient increased from 0.43 in 1990 to 0.57 in 2021, indicating rising income inequality; however, the net Gini coefficient remained stable around 0.38 due to effective social redistribution mechanisms [6][7] - Japan's social security expenditure accounted for 25.12% of GDP in 2023, significantly higher than China's 7.7%, reflecting a strong commitment to social welfare [7][8] Group 4 - The rise of budget brands like Uniqlo and Muji during Japan's economic downturn illustrates a shift towards "defensive consumption," where consumers prioritize quality at lower prices [10][11] - The average monthly household expenditure on clothing decreased by 36% from 1990 to 2020, highlighting the impact of economic pressures on consumer behavior [11][12] Group 5 - Japan's business environment is characterized by a strong emphasis on reputation and contract fulfillment, which has fostered a culture of efficiency and quality despite economic challenges [12][14] - The concept of "cooperative fulfillment" in Japanese society emphasizes maintaining dignity and respect in transactions, which has helped sustain social stability during economic downturns [14][15] Group 6 - Comparatively, Japanese households had a more diversified asset portfolio in the 1990s, with 36% in equity assets, while Chinese households are heavily reliant on real estate, which poses greater risks in case of market downturns [17][18] - The high leverage in Chinese households, with housing loans at 33.9% of nominal GDP, suggests that any economic shock could have more severe consequences compared to Japan's historical context [17][18]