The Low Cost of Living in Japan

Back to Contents of Issue: May 2003

One expat argues that it's easy to cut daily living expenses in Tokyo and Osaka.

by Mark McCracken

THE ECONOMIST INTELLIGENCE UNIT recently reported that Tokyo and Osaka placed No. 1 and 2, respectively, as the most expensive places for expat executives to live. We can only hope that this doesn't prompt yet another wave of media reports about how cantaloupes in Japan sell for JPY10,000. Yes, some things, like the perfectly rounded and excessively packaged melon -- or the cost of this magazine -- are absurdly expensive here, but do Tokyo and Osaka really deserve to be called the two most expensive cities in the world?

The EIU report assumes that
expats have the right to live in a
foreign country in the same manner
as they would back home

The Economist Intelligence Unit (EIU) report assumes that expats have the right to live in a foreign country in the very same manner as they would back home. Seems logical on the surface, and there likely are cases where a talented executive will only be persuaded to move his or her family on the condition that there be a 4-bedroom house with a 2-car garage on a quarter acre of land waiting for the family to call home. However, a few minor adjustments in lifestyle can produce such dramatic financial savings that even a habitual big-spender sometimes can't resist.

One obvious example is the cost of taking a taxi from the airport to the city center (a measurement the EIU includes in its survey). While a taxi ride from Narita to downtown Tokyo costs around JPY18,000, airport buses and rail transportation are clean, frequent and run about JPY3,000.

Or what about those car expenses in the EIU survey? Owning a car in Tokyo or Osaka clearly falls into the "convenience," not the "necessity" category. Even families with children probably need only one car. Cut out one or both cars and the resulting insurance, depreciation and maintenance costs will dramatically reduce a family's expenses. The decision to live within walking distance of a train station doesn't affect your ability to find a wide variety of living spaces, either.

Japan's generally accepted corporate system of supplying employees with monthly train passes is another source of savings. The pass that takes you from your home in Kobe to your office near Osaka Station, for example, gives you access to the 13 train stations in between -- even when you're not headed to work.

The EIU includes the prices of an international foreign daily newspaper, a local newspaper and a weekly Time magazine as three of the criteria in determining the cost of recreation in each city. Scrapping all three items and replacing them with the cost of broadband Internet service, with its access to text, video and audio news from around the world, as well as its inexpensive international telephone service, would both increase the relevance of the survey and bring the cost of living in Japan more in line with reality. With service available from around JPY2,500 per month, Japan's broadband Internet service is among the least expensive in the world. A 3-minute telephone call from Japan to the US using a broadband provider is as low as JPY7.5.

Finally, pity the Japanese chicken breast. While the rest of the bird -- the liver, wings, legs and skin -- make tasty yakitori, the breast, with its relative dryness, is cast away as the part that is left over. Westerners who value skinless chicken breasts as a low-fat source of protein can find them at the grocery store often at prices lower than those in their home country. The chicken breast is a great example of the niche markets that expats can take advantage of. Need some 31 cm Nike shoes? Look around. Although the smaller sizes have sold out, you can probably find one extra large pair still unsold and on sale.

According to the EIU survey, Tokyo and Osaka are 39 and 36 percent more expensive, respectively, than the base city, New York. However, the next survey, due in June, may reflect some of the deflation currently digging into the Japanese economy. @

Mark McCracken is an Osaka-based freelance writer who makes a great margarita. Otherwise, he lives frugally in Japan's second city.

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