TT-580 -- Poverty Amongst Young Adults, e-biz news from Japan

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A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, September 05, 2010 Issue No. 580


- What's New
- News
- Candidate Roundup/Vacancies
- Upcoming Events
- Corrections/Feedback
- News Credits

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There was a disturbing news item in the Nikkei this week
about many young singles in Japan falling below the poverty
line and having to live at home to make ends meet. While
the world was fascinated with parasite singles some years
ago, it seems now that many young people are forced by the
economy rather than by choice to live with their parents.

According to the Labor Ministry, which is starting to
reveal facts and figures about poverty in Japan that were
previously kept quiet by the LDP, fully 69.7% of young
singles aged 15-34 who work outside of full-time
employment are unable to support themselves from their job
income alone. Since 32.9% of Japan's 64m-person employed
workforce consists of people aged 15-34, and about 1/3 of
them are part-time or contract workers, then we can surmise
that somewhere around 4.4m young people are unable to live
from their work incomes alone.

The report notes that most of those people unable to
support themselves through their jobs are working in the
IT, communications, hospitality and food services
industries. No surprise there. IT may sound technical, but
on the low end you are talking about help desk work that
essentially consists of being nice on the phone and
learning some basic responses and escalation strategies.
Waiting tables, tending bars, or flipping burgers are
famously underpaid in any country, but with no tipping
system and plummeting patronage, it makes more sense
to go live in Okinawa on the beach and register as
unemployed for a while.

[Continued below...]

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[...Article continues]

41 of the nation's 47 prefectural governments have just set
the minimum wage numbers for their workforces, and in Tokyo
this was set at JPY821/hour, up 30 yen from last year. At
that rate, a person working 160 hours a month would make
JPY131,360, barely enough to pay rent, food, and transport,
and not much more. Yes, this is the minimum wage, but if
you look at what part-time work is paying recently in the
arbeit magazines, the going wages are not much more than

Indeed, a recent poll by employment information company DIP
found that nationwide temps (and these are the better jobs
which yield sufficient profit for the temp agencies to be
brokering them) were earning JPY1,349/hour in July, down
0.7% over the month before. Employment agency Recruit found
through its survey that the nation's average income for
temp workers in June was JPY1,450, the 24th straight
monthly drop.

These numbers do put a worker above the poverty level, but
not by much. And if you're in hospitality or similar area
of business, then the chances are that if you're under 30,
you're also under the JPY2m/year poverty line.

The problem is that in days gone by, kids with lesser
education could still access a stable job by first sweating
out an entry level position in office administration. Over
time and with hard work, these positions would convert
into regular employment and maybe management
responsibility. However, with the difficult economy,
companies other than some exporters are still cutting
their back office positions significantly.

And things are probably going to get worse, not least of
which because of a growing trend to outsource lower end
work to other countries. You have companies such as
InfoDeliver, a Tokyo-based Business Process Outsourcing
(BPO) firm that plans to increase its office staff in
Dalian to 2,000 Chinese nationals by the end of this year.
The company outsources Japanese-language data entry,
accounting, and HR tasks from insurance companies and
took JPY1.74bn of orders last year. This year it plans to
record revenues of JPY3.32bn -- a two-fold increase.

There are many other players in this space, including the
likes of Transcosmos (300 employees planned in Suzhou),
Pasona Tech (200 employees in Dalian), and Nomura Research,
with an undisclosed employee headcount. Research firm
Gartner reckons that the Japanese BPO market last year was
worth around JPY1.28trn, and will hit 1.45trn in the next
four years. Fewer of those jobs will go to the current temp and
contracting generation of workers, and thus the spiral will

There is something seriously wrong when young workers can't
support themselves. Yes, in any country, getting started
with your working life when under educated is a struggle.
But given that these same people comprise 1/6 of the tax
base for Japan's future generations of retired people, one
wonders how things are going to turn out?


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...The information janitors/


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+++ NEWS

- Uniqlo shine wearing off?
- Takeda buys license for obesity drug
- 2.06% annual interest on 35-year loans
- Foreign institutions pushing up yen?
- Officially the hottest summer

-> Uniqlo shine wearing off?

Uniqlo's Fast Retailing said that store sales were down
9.3% in August versus the same period a year ago, although
sales for the year ending August were up by 4.7%. ***Ed:
Analysts are giving various reasons why Uniqlo's sales are
down, ranging from the hot weather spiking what should have
been a strong Autumn fashion release, through to the
ongoing recession causing people to spend less. We think
the main reason is that Uniqlo simply isn't so fashionable
as it was a year ago. The company definitely didn't do a
good job with its summer line-up, with lots of stock that
LOOKED cheap, and seems to have lost some of its fashion
edge. We imagine that the demand for thermal underwear will
boost winter numbers again, but the company really needs to
pay more attention to design and materials for the warmer
months.** (Source: TT commentary from, Sep 2,

-> Takeda buys license for obesity drug

Japan's largest pharma company, Takeda, has struck a
potentially major deal with US-based Orexigen Therapeutics,
involving the Americas marketing rights for Orexigen's
obesity drug Contrave. Takeda will pay Orexigen an upfront
fee of US$50m for exclusive marketing rights in the USA,
Mexico, and Canada, and will pay out up to US$1bn if
Orexigen is able to get the drug approved by the US Food
and Drug Administration. ***Ed: Takeda made a similar size
deal with another company last year and has said that it is
targeting obesity as a growth market in coming years.
(Source:, Sep 3, 2010)

-> 2.06% annual interest on 35-year loans

The government's Housing Finance Agency, which buys
mortgages from banks then securitizes and sells them to
institutional investors, has said that its Flat 35
fixed-rate mortgages will move to a minimum interest rate
of 2.06% in September, the lowest rate ever. Flat 35
mortgage rates drop by 1% to the new low rate for the first
10 years of a mortgage when the borrower is building an
energy-efficient, earthquake-resistant home. (Source: TT
commentary from, Sep 2, 2010)

-> Foreign institutions pushing up yen?

There has been a lot of speculation as to why the yen keeps
getting stronger. We think the main reason is simply that
the U.S. through Quantitive Easing is playing a game of
"beggar thy neighbor" and the Europeans are more aware of
how the game is played than Japan is. The Nikkei this week
gives a more up-close view of what is happening by saying
that foreign institutional investors have found Japan to be
a safe haven for their funds, and are buying huge amounts
of yen as a hedge against the slowing U.S. economy.
Previously the blame was put on speculators. (Source: TT
commentary from, Sep 2, 2010)

-> Officially the hottest summer

OK, so you know it's hot, and it's been like this for about
8 weeks, with probably another 2-3 weeks to go. Now it's
official that this summer has been the hottest since
records started in 1898, according to the Japan
Meteorological Agency. The average temperature was 1.64
degrees Celsius hotter than average between June and August
-- compared to the previous hottest spell in 1994, which
was an average 1.36 degrees. As a result there have been at
least 132 heat-related deaths and 30,000 heat stroke
admissions to hospital, nationwide. (Source: TT commentary
from, Sep 2, 2010)

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.



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or expanding in Japan, as well as other employers of


BiOS is currently looking for an experienced and highly
successful SMB Sales Manager to join our clients,
specializing in sales of Software As A Service. This person
will lead a sales department which is currently in the
process of shifting to a direct sales model for Japan, and
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Remuneration is up to JPY16m depending on your experience
and level


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In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to

*** In TT577 we carried a news item that recent research
proves that not all sugars are the same, even though them
may appear to be closely chemically related. In TT578, a
reader provided an interesting reference to a YouTube video
which appears to prove that indeed, High Fructose Corn
Syrup in particular is killing a generation of Americans.
The video is very convincing.

However, we have a reader who feels that our preference for
honey over sugar is misplaced and makes the following

==> Reader: It's been well known for decades that different
sugars are metabolized differently; I remember learning
about the difference between e.g. sucrose and glucose in
grade 12 biology back in the 80s.

And in particular, high-fructose corn syrup has been over
the past decade or two been looming as potentially a Bad
Thing, in terms of public health. It seems to me still an
open question, but at least we can see how there could be
a mechanism for this sort of thing.

But before you get all excited about honey, you might want
to have a quick look at what's really in it. From Wikipedia's
entry on honey:
* With respect to carbohydrates, honey is mainly fructose
(about 38.5%) and glucose (about 31.0%),[1] making it
similar to the synthetically produced inverted sugar syrup
which is approximately 48% fructose, 47% glucose, and 5%

And from the entry on high-fructose corn syrup (HFCS):

* Honey typically has a fructose/glucose ratio similar to
HFCS 55, as well as containing some sucrose and other
sugars. Like HFCS, honey contains water and has
approximately 3 kcal per gram. Because of its similar sugar
profile and lower price, HFCS has been used illegally to
"stretch" honey. As a result, checks for adulteration no
longer test for sugar but instead test for minute
quantities of proteins that can be used to differentiate
between HFCS and honey.

==> We respond: Because something is written by a crowd
sourced online application doesn't mean that it is correct.
Indeed, even if it's written by doctors doesn't mean that
it's correct. We note that in the same article, above the
honey comment, is the sentence: "Studies by The American
Medical Association suggest 'it appears unlikely that HFCS
contributes more to obesity or other conditions than
sucrose' but call for further independent research on the

One could imagine that the AMA is the last word on this
subject, but of course as the video we highlighted in TT578
shows, this is not necessarily the case and in fact HFCS
could well become the Thalidomide of our generation.
Wikipedia is a great tool, and the majority opinion is
often right, but not always. Given the choice of surviving
a month down a tunnel with either a pot of honey or a pot
of HFCS, we know what we'd choose. Mankind has been eating
copious amounts of honey for generations without apparent
side effects other than potentially a toothache. We cannot
say the same thing about HFCS.

If you have the time, watch this video, it's very
convincing, and the presenter has the credentials to make
it so:


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