Jun 28, 2021 (Nikkei) - Despite mounting concerns of inflation in the rest of the world, consumer prices and wages in Japan have both stubbornly resisted upward pressure for decades.
Still, cracks are starting to emerge as overseas businesses from Netflix to steelmakers shed light on how Japan's deflationary spiral could hurt both its consumers and businesses.
"It's just a bit expensive," one Tokyoite grumbled back in February in response to new monthly subscription costs announced by Netflix.
The video-streaming giant revises its pricing about every two years. Its most recent update increased the standard monthly subscription in Japan by 13% to 1,490 yen ($13.44) and in the U.S. by 8% to $13.99, bringing prices across the world roughly on par.
That decision represented a break from the usual pricing schemes among global companies, which tend to charge Japanese customers less.
For example, Amazon.com charges $119 in the U.S. and 79 pounds ($110) in the U.K. per year for Prime membership. The same perks, which include free videos and delivery, cost 4,900 yen, or $44.50, in Japan.
Universal pricing around the globe hurts customers based in countries where salaries have stopped growing. Japan is a prime example, with real wages down 9.7% as of last fall from their peak in 1997.
U.S. wages rose 22.2% over the same period, while U.K. and South Korean wages jumped 29.7% and 57.9%, respectively.
The relative cost of iPhones shows just how badly stagnant wages can squeeze consumers in affected areas. The iPhone 12 Pro Max with 512GB of memory, which is the best-equipped model currently available, is priced at roughly 45% of the average monthly pay in Japan. In the U.S., it costs just 25% of the average monthly pay.
A hint for what could be in store in the future lies in the peculiar readings in industrial material prices. Hot-rolled steel sheet prices, for one, are 10% to 20% more expensive in overseas markets. That was virtually unheard of a decade ago.
