As inflation advances in Japan, the gap between people who own assets and those who do not is widening, while rising rents in central Tokyo are putting pressure on household finances. The argument is that it will now be important to change one’s behavior, including by negotiating for higher pay or changing jobs.
As inflation continues, the view is emerging that rising asset prices are widening the gap between people who own assets and those who do not. Asset owners benefit relatively from the appreciation of their holdings, while those without assets are left to bear the direct impact of rising living costs.
Sharp increases in rents in central Tokyo have become increasingly apparent, and it is not uncommon for the rent charged to a new tenant to be 10–15% higher when a property changes occupants. The impact on household finances is particularly severe for households living in central Tokyo without buying a home. Even if wages rise by 3%, real wages are likely to decline when prices rise by 5%.
In many countries, including Japan, wage increases sufficient to keep pace with inflation and career changes have long been accepted as standard expectations. Japan is finally confronting this reality, and people are now required to respond by negotiating for higher pay or moving to a workplace with better terms.
Simply continuing to endure in silence while clinging to the values of the deflationary era will not keep pace with inflation, and living standards will gradually deteriorate. The proposal is that, recognizing that “the era of just keeping quiet and putting up with it is over,” people need to change both their mindset and their actions.