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Sunday, March 11, 2007
What will happen to all that Japanese boomers' cash?
Special to The Japan Times
Hurry! Don't miss out! Yamaha, the giant musical-instrument manufacturer, is offering three-month ukulele courses! Or, the more adventurous can avail themselves of the services of travel agents at JTB who are promoting a six-day tour -- or an eight-day rongubakeeshon (long vacation) tour of Hawaii, where they can study the ukulele in a "fun program of local culture."
Not tempted? Maybe you were simply born too late, into the wrong generation. These fascinating activities are targeting the so-called dankai no sedai (baby boomers).
As JTB says in its promotional material for the Hawaiian getaway, "The key phrase for products aimed at the dankai no sedai is 'Travel with a Purpose, Travel with Ease.' " The purpose in this case is ukulele practice. The ukulele, apparently, is the new instrument of choice for people in their 60s. It's great news for Hawaii; and Hilo Hattie, were she alive, would be hula-dancing all the way to the bank.
Born in 1944, I missed being an American baby boomer by a year or two, but my heart beats with the Groovy Generation. In Japan, the dankai no sedai are, strictly speaking, people born in 1947, 1948 or 1949, though some social scientists extend this another four or six years. These are the people who were in their teens in the 1960s. They wore jeans and miniskirts; they let their hair down; they expressed their independence in their (or their parents') cars, doing doraibu ("drive," or cruising); they discovered The Beatles like millions of young people around the world, and aspired to live according to their freewheeling messages.
The dankai no sedai had a lot in common with my generation in America, because many of us grew up in similar circumstances. We hadn't fought in World War II and we didn't know dire poverty. In addition, we were told by our parents, many of whom certainly had known dire poverty during the Great Depression of the 1930s, that we were fortunate to be born when we were.
They were right about that. And yet, this good fortune was presented to us as a mixed blessing. On the one hand, we did not have to suffer deprivation. But on the other, we were supposed to appreciate and be grateful for the fact that we had not suffered, and act as if we had. It gave us complex sentiments, sending many of us out of our country to do good deeds in the Peace Corps; but it also produced the likes of George W. Bush, Baby-Boomer-in-Chief, keen on re-creating the battles of our fathers on battlefields of his own making.
For the Japanese dankai no sedai there were no such complex choices. The era of swift economic growth was in full swing by the time they joined the workforce. The generation before them had created the boom times through intense diligence and personal industry. All they had to do was keep up the good work, as it were.
As individuals, in Japan they are generally characterized as being self-assertive and feisty, though I am very wary of lumping what is now approximately 7 million people into any category of personality. But, whatever their extrovert characteristics, they have been thrifty, despite succumbing to a consumption boom in the 1980s.
There is over $2 trillion in Nihon Yusei Kosha (Japan Post) savings accounts, a hefty slice of which belongs to baby boomers. Add to this more than half as much again in life-insurance policies held there, and you have a very cashed-up dankai no sedai indeed. Not only that, but estimates of their severance pay and retirement bonuses in 2007, 2008 and 2009 are in the vicinity of 45 trillion yen. It's a lot of money to spend on ukulele lessons.
So, what are these "active seniors," to use the English phrase given to them by eager marketing mavens, going to do with this ocean of liquidity? Will they put it in a bank account with an interest rate that has more zeroes than a squadron of kamikaze pilots? Buy real estate in Hamamatsu or Hawaii, only to have to sell it for less a few years later? Leave it all to their 1.2 grandchildren?
How about spending it? OK, but on what? Well, in the West we have our SKI trips, SKI, of course, standing for Spend the Kids' Inheritance. Luxury cruise liners, wall-to-wall in gray money, ply the oceans of the world. Japanese baby boomers, too, take cruises and go on extravagant holidays. They also have their gentle hobbies and their gourmet outings. But unless you are going to buy a fancy new car every few years, or seriously renovate your home, you will still have piles of money in the bank, at the disposal of corporations and funds who invest it overseas for high-interest earnings. Rest assured, your money is hard at work. It's just not hard at work for you.
Fire in the belly
The fact is that the dankai no sedai folk, though largely not having known poverty themselves, are still conservative when it comes to their savings. Here "conservative" is used in its primary meaning: tending to conserve. They know that pensions in Japan are not sufficient to sustain them, and that health costs are a big unknown. They inherited the frugal gene from their parents, and view their massive savings as their only reliable form of security.
Virtually every discussion I have seen in the media about this generation focuses on their purchasing power, and how to separate them from their stashes of cash. But hey, didn't Sophie Tucker, the Last of the Red Hot Mamas, say that life begins at 40? Some say that 80 is the new 40, but I would put it more around 59 and 11 1/2 months (speaking personally), give or take a fortnight. The dankai no sedai may be silver rather than red hot, but there's still fire in the belly as well as yen in the bank.
In November 2005, Nomura Sogo Kenkyujo (Nomura Research Institute) did a survey on "The Second Life for Baby Boomers." Five hundred white-collar workers between 55 and 60 were asked how they felt about retiring. A full 78.2 percent said that they wanted to continue to work past 60. Fifteen percent wished to start up their own businesses. About half of those surveyed wanted to spend retirement managing their funds, traveling, doing Internet shopping, etc. Of those who said they wanted to continue working, nearly one-third gave the reason as "serving society more." Only 15.6 percent said they "didn't want to work ever again."
The report of the NRI survey concluded that, in 2010 and after, "the baby boomers' interests will increasingly be toward a pluralistic workstyle (hatarakikata). It will be more and more difficult to have a fulfilling second life just by having fun."
I've got nothing against the ukulele or hula dancing, and I'll be the first to spend my kids' inheritance when I get it. But, please, all you market mavens, most of us are educated, active, willing to work and moderately healthy. We may not have a six-pack, but we don't have a use-by date tattooed on our bellies either.
The dankai no sedai are more than a marketing concept; they may just be Japan's secret untapped resource.