Nearly 20% of Japan households using e-money but cash still king

About 18.5 percent of Japanese households said they use electronic money, such as smartphone apps and debit card payments, on shopping trips where ¥1,000 or less is spent. (AFP)
Updated 18 November 2019

Nearly 20% of Japan households using e-money but cash still king

  • About 18.5 percent of Japanese households said they use electronic money, such as smartphone apps and debit card payments
  • Prime Minister Shinzo Abe is pushing to make more Japanese switch to cashless payments

TOKYO: Almost a fifth of Japanese households use electronic money for small purchases, a survey by a central bank-affiliated research institute showed, up from a year ago and a sign the country’s cash-hoarding culture is changing.
In the survey published on Monday and conducted between June and July, 18.5 percent of households said they use electronic money, such as smartphone apps and debit card payments, on shopping trips where ¥1,000 ($9.17) or less is spent, up from 15.4 percent in the previous year.
Among single-person households — 43 percent of whom are in their 20s and 30s — the ratio was much higher at 35.6 percent, suggesting government efforts to prod Japanese to go cashless may be paying off, at least among the younger generation.
Despite the growth in electronic payments, Japan’s “cash-is-king” mentality remains entrenched with the survey showing 84 percent still use notes and coins for small purchases.
And for payments exceeding ¥10,000 and up to ¥50,000, 48.5 percent of households said they pay by cash and 3.4 percent by electronic money, the survey showed.
A low crime rate, years of ultra-low interest rates and a nationwide network of automatic-teller machines (ATMs) have long made cash appealing in Japan, giving people few reasons to shift to cashless payments.
Prime Minister Shinzo Abe is pushing to make more Japanese switch to cashless payments to allow stores to automate sales estimates and banks to cut back on costly ATMs.
Shoppers have recently been encouraged to ditch cash for e-money after the government introduced a rebate program to ease the pain of a sales tax hike on Oct. 1.


Innovation jobs flocking to a handful of US cities

Updated 09 December 2019

Innovation jobs flocking to a handful of US cities

  • Economists fear job clustering could have a “destructive” influence on society

WASHINGTON: A new analysis of where “innovation” jobs are being created in the US paints a stark portrait of a divided economy where the industries seen as key to future growth cluster in a narrowing set of places.

Divergence in job growth, incomes and future prospects between strong-performing cities and the rest of the country is an emerging focus of political debate and economic research. It is seen as a source of social stress, particularly since President Donald Trump tapped the resentment of left-behind areas in his 2016 presidential campaign.

Research from the Brookings Institution released on Monday shows the problem cuts deeper than many thought. Even cities that have performed well in terms of overall employment growth, such as Dallas, are trailing in attracting workers in 13 industries with the most productive private sector jobs.

Between 2005 and 2017, industries such as chemical manufacturing, satellite telecommunications and scientific research flocked to about 20 cities, led by well-established standouts San Francisco, Seattle, San Jose, Boston and San Diego, the study found. Combined, these mostly coastal cities captured an additional 6 percent of “innovation” jobs — some 250,000 positions.

Companies in those industries tend to benefit from being close to each other, with the better-educated employees they target also attracted to urban amenities.

Brookings Institution economist Mark Muro said he fears the trend risks becoming “self-reinforcing and destructive” as the workforce separates into a group of highly productive and high-earning metro areas and everywhere else.

Even though expensive housing, high wages, and congestion have prompted some tech companies to open offices outside of Silicon Valley, those moves have not been at scale. Most US metro areas are either losing innovation industry jobs outright or gaining no share, Muro wrote.

Over this decade, “a clear hierarchy of economic performance based on innovation capacity had become deeply entrenched,” Muro and co-author Rob Atkinson, president of the Information Technology and Innovation Foundation, wrote in the report. Across the 13 industries they studied, workers in the upper echelon of cities were about 50 percent more productive than in others.

For much of the post-World War Two period labor was more mobile, and the types of industries driving the economy did not cluster so intensely, a trend that started reversing around 1980.

Concerns that the US is separating effectively into two economies has sparked support for localized efforts to spread the benefits of economic growth.

The Federal Reserve has flagged it as a possible risk to overall growth, and some of the presidential candidates running for office in 2020 have rolled out proposals to address it. One aim of Trump’s decision to impose tariffs on imports from China and elsewhere is to revive ailing areas of the country.