Key facts
- The purchasing power of Japan's middle class has declined substantially.
- This decline is occurring despite years of pay raises.
- Higher tax and social security payments are the primary cause.
- Households have reduced spending on non-essential items such as learning and entertainment.
The purchasing power of Japan's middle class has significantly eroded, even with nominal pay raises over recent years. This downturn is attributed to increased tax burdens and social security payments, which effectively reduce disposable income. As a result, households have been compelled to cut back on discretionary spending, including expenditures on education and entertainment, further impacting their overall economic well-being.