──Why We Can Be Content with Things As They Are──

As a new fiscal year begins, everyone naturally wonders about their financial prospects for the coming months. To put it bluntly, the outlook is as follows:

“Fiscal year 2007 will likely be a year where we truly feel an economy that forces price hikes while degrading quality and services.”

Why is this the case? Let's look at the primary reason.
The government consistently and loudly promotes the Japanese economy, claiming it's in a period of prosperity that surpasses the Izanagi boom, the longest on record. However, our lived experience is one of widening inequality, stagnant wages and bonuses, and the looming pressure of tax increases.

It's true that large corporations, after thorough restructuring, are not increasing their permanent staff. Instead, they hire inexpensive part-time and temporary workers, significantly reducing labor costs.
Meanwhile, they squeeze their subcontractors, minimize capital investment, and diligently practice austerity. It's only natural that they are profitable. This profitability, however, is confined to large corporations. One major automaker, for instance, reported profits exceeding one trillion yen.

The reality for small and medium-sized enterprises with capital of 10 million yen or less is one of struggling to survive.

Large Corporations with Capital of 1 Billion Yen or More Account for Just Over 0.2%

Let's examine the breakdown of major corporations by capital, according to National Tax Agency data.

There are 2.8 million major corporations in Japan. If we include very small corporate entities like greengrocers and soba noodle shops, the number rises to several million. Among these major corporations, those with a capital of 1 billion yen or more constitute a mere 0.24%. Even including corporations with capital of 100 million yen or more, the figure is only about 1.4%.

For reference, companies with capital of 10 million yen or less number approximately 1.5 million, making up about 56%. Companies with capital between 10 million and 100 million yen represent over 40% of the total.
In essence, the government is highlighting the prosperity of large corporations, which represent less than 1% of the total, to paint a picture of economic boom.

These large corporations have well-established statistical reporting, making it easier for the government to collect data. Relying solely on government-released figures is clearly a mistake.

Continued in Part 2