Economic fallout from the coronavirus pandemic may have widened the gap between the nation’s rich and poor.
Job losses, especially in the dining and travel industries, have devastated many, while stock and other asset markets are booming on the back of global monetary easing.
At Isetan department store in Tokyo’s Shinjuku Ward, which regularly posts the highest sales numbers of all department stores in Japan, a worker in the jewelry section called strong sales last summer “mysterious.”
“Despite a lack of exuberance at the store, we saw very high sales,” the worker said.
The store’s primary customers were wealthy regulars and the so-called new rich, including young managers of information technology firms and YouTubers who increased their earnings by taking advantage of the pandemic.
Such customers may have already picked out what they wanted via the internet during last spring’s national emergency but waited to make their purchases in store. Jewelry worth several million yen was sold on the fly, the worker said.
Sales of luxury import cars priced over ¥10 million were also brisk. Sales totaled 22,712 units in 2020, surpassing the level seen the year before.
“Situations around (rich people) do not necessarily affect them,” said a person involved in the auto industry.
Massive stimulus and monetary easing measures by Japan, the United States, Europe and elsewhere to bolster pandemic-hit economies have sharply boosted asset prices.
Such measures briefly lifted the 225-issue Nikkei stock average above the 30,000 line for the first time in over 30 years. Cryptocurrencies such as Bitcoin also surged, prompting some market participants to be alert against potential asset-inflated bubbles.
Nomura Research Institute estimates the number of wealthy households — defined as those that hold net financial assets of more than ¥100 million — totaled 1.33 million as of 2019.
Hiroyuki Miyamoto, a partner and chief consultant at the Tokyo-based think tank, said the company is likely to make a similar estimate for 2020 because higher stock prices offset the economic impact of the pandemic.
Meanwhile, the pandemic took a toll on nonregular workers, many of whom work in service sectors.
“I couldn’t have imagined a year ago that I would come to such a place,” a 49-year-old unemployed man said in December as he received food from an aid group at a park in Tokyo’s Ikebukuro district.
The man lost his job at a restaurant where he had worked for years.
The number of regular employees rose 360,000 in 2020 from a year earlier, but that of nonregular workers dropped 750,000, according to Ministry of Internal Affairs and Communications data.
That indicates that companies adjusted their headcounts by cutting nonregular staff to survive the pandemic-hit economy.
Ryutaro Kono, chief economist at BNP Paribas Securities (Japan) Ltd., said that unstable nonregular employment is one of the reasons for the slow economic recovery in recent years.
If consumer spending becomes sluggish as nonregular workers cut expenditures on fears of being laid off during recessions, “the recovery of the Japanese economy will continue to be lackluster,” Kono warned.
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Read More: COVID-19 cuts jobs and boosts stocks, widening economic gap in Japan