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mike_esspe

1995 - $42000 per capita

2012 - $46000 per capita

http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&m...

Compare it with a high growth rate between 1985 and 1995

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The problem with that data set is that it can produce huge fluctuations due to exchange rate volatility. I think a better measure would include 'purchasing power parity'.

For example: http://en.wikipedia.org/wiki/List_of_countries_by_past_and_f...

Japan:

1995 - $22,955

2012 - $35,724

Average growth: 2.6% per year

United States:

1995 - $28,763

2012 - $51,709

Average growth: 3.5% per year

However, the above figures may not be a good indication of the increase in the standard of living for each county because:

(1) Japan has almost no immigration while US has had a huge influx of immigrants. My guess is that immigrants have lower incomes than the general population but much higher incomes than in their previous country. It is not fair to compare an immigrant's 2012 income with the average US income in 1995.

(2) USD GDP growth between 1995 and 2012 heavily favoured an elite, very small minority. The vast majority of the US population increased their average income by far less than 3.5% per year. I doubt Japan has skewed its income growth to the same degree.

You are, to my understanding, not correct about #2. I don't have a star for you off the top of my head. It is a bit difficult to compare transnationally because of the differing tax regimes of Japan and the US. CEOs of peer companies have similar lifestyles but in Japan they are on the books at low six figures in income, despite massive subsidization of their lifestyle by the company.

Hi Patrick - I just found a good source of statistics on this point here: http://topincomes.g-mond.parisschoolofeconomics.eu/#Database:

Figures for the top 1% income share including capital gains:

Japan 1995: 8.67%

Japan 2010: 10.44%

United States 1995: 15.23%

United States 2010: 19.86%

And for the top 0.01% income share including capital gains:

Japan 1995: 0.82%

Japan 2010: 1.03%

United States: 1995 2.46%

United States: 2010 4.78%

So at the extreme end of the scale, income inequality is not just greater in the US but growing at a faster rate.

I think Hans Rosling's TED talk may provide some interesting information: http://www.ted.com/talks/hans_rosling_shows_the_best_stats_y...

Basically, he argues (perhaps my interpretation) through statistics that income equality is very significantly related to what is typically considered a good country to live in, which in contrast to many, does not include salary/GDP and such monetary stats but rather how long you live, infant mortality rates, social mobility, etcetera, where the Nordic countries and Japan outperform all other countries (more or less) and where the USA have it really difficult to compete against other Western/developed nations.

Thus, one can quite easily argue that regardless of the adjusted GDP growth, Japan has managed to develop in a much more healthy way compared to the USA, which may be because of the quickly rising income equality.

Was on the phone before, so couldn't include references in the grandparent post and it's now too late to edit. Here's some:

http://www.forbes.com/sites/eamonnfingleton/2013/08/11/now-f...

"Whereas the U.S. labor force increased by 23 percent between 1991 and 2012, Japan’s labor force increased by a mere 0.6 percent. Thus, adjusted to a per-worker basis, Japan’s output rose respectably. Indeed Japan’s growth was considerably faster than that of Germany, which is the current poster child of economic success."

Also: http://snbchf.com/global-macro/gdp-growth-per-capita/

Yes i heard the opinion on the Japanese economic situation that it's hopeless because you can't fix something that ain't broken. Japanese have a problem with demography, not economy, their labor force is shrinking and people are getting older which explains their GDP being stuck, no other problem to speak of than that.

And here China will also find itself in the similar situation soon due to their one-child policy for the last 40 years. And it will be even worse than Japan's. Fortunately U.S. demographics is healthy - it's nice to have a conservative and religious society :)

With the risk of picking on details (sorry if it sounds that way!): From what my understanding (and also what I've heard is the story from Chinese people and gov) is that the situation of China regarding demographics is the way it is because Mao promoted population growth without end, mainly because a larger workforce would be able to outperform in output (which we've actually seen now is true). The downside with that policy was that there were no thought taken to when it would end, and the government/leaders that came after saw that a growing population would be impossible to feed (it was a big problem already for Mao) and it would eventually cause a sort of population bubble. Thus, they enforced the one-child policy to stop this. The current Chinese government seems to be quite aware of the demographics problems. According to official statistics (based on from what I've heard from a Chinese person), they estimate China will grow from the current 1.3 billion population up to 1.6 before it stagnates and possibly decreases. Considering the problems of a decreasing population and skewed demographics, they have started to loosen up the one-child policy however so there seems to be thinking within the top of China that they need to make a slow transition back to a more healthy size of the population.

By the way, this seems also to be the case in general with the top leaders in China. As been previously stated, China is probably way behind on the prerequisites to be able to run a working democracy (compare for example many of the countries where democracy have been quickly forced upon a country such as many of the countries where the US have been engaged in various conflicts such as Iraq and Afghanistan as well as countries in Central America). The positive sign from the leaders in China is their current and (as it looks anyway) real fight against corruption, which is a huge problem in any democracy (it seems anyhow). Of course, education is another problem but it seems like maybe there's not so much that can be done right now that let it take the time it takes to develop (since old people in general are not targeted for the educational system).

This, in combo with my comment where I mention Hans Rosling's interesting statistics, makes me quite positive about the future of China. Hopefully it lands rather than crashes and perhaps it is healthier to the country to avoid a crash and slowly manage the much needed creative destruction rather than face the consequences of a crash. A crash may for example cause a lot of social unrest, which probably will become a larger problem for China as their growth slows. Hopefully, they'll plateau into a healthy developed country, similar to what (in my opinion) it seems like Japan did. Although we don't here much about it, China is a much bigger countries with many more different groups of people than Japan (as far as my knowledge goes anyhow) and I think social unrest has much bigger potential as a serious issue to China's well-being (and thus probably the world's well-being since we do so much trading with China).

China has a long way to go and lots of problems such as corruption, educational level of the average man, transparency, human rights, and so forth. I hope for the best! :) My 5 cents anyway!

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