What’s a univer­sity de­gree worth in Ja­pan? About $25,500 a year

Business Standard - - TAKE TWO - BLOOMBERG

What’s a univer­sity de­gree worth in Ja­pan? About $25,500 a year based on start­ing salaries for new grad­u­ates, and the fig­ure has barely budged over the past decade.

That’s about half what their coun­ter­parts start out on in the US, where pay for new grad­u­ates has climbed 8 per­cent since 2007, ac­cord­ing to the Na­tional As­so­ci­a­tion of Col­leges and Em­ploy­ers.

When grad­u­ates opened their first monthly pay­checks ear­lier this year, on av­er­age they re­ceived 213,000 yen ($1,885), be­fore tax, ac­cord­ing to a sur­vey by the Kei­dan­ren busi­ness lobby group. An an­nual bonus will likely take earn­ings for the year to about 2.9 mil­lion, ac­cord­ing to labour min­istry data for 2016, but to­tal monthly pay will still be lower than last year.And spend­ing a few more years at col­lege doesn’t add much ei­ther, with the av­er­age salary and bonus for some­one with a masters de­grees at 3.1 mil­lion yen.

With new grad­u­ates start­ing at such a low base and lit­tle prospect of strong pay rises com­ing any­time soon, this points to­ward tepid growth in do­mes­tic con­sump­tion and an econ­omy that re­mains re­liant on ex­ports for a large por­tion of its ex­pan­sion. This situation re­flects the over­all stag­na­tion in Ja­panese wages, which rose only 1 per­cent in the decade through 2016.

But while wages are low, many large Ja­panese com­pa­nies do pro­vide ben­e­fits such as trans­port al­lowances, sub­si­dies for work­ers with chil­dren, cheap hous­ing in cor­po­rate dor­mi­to­ries and dis­count lunches.

That adds another 110,000 yen a month or so to the to­tal com­pen­sa­tion value.

Spend­ing a few more years at col­lege af­ter grad­u­a­tion doesn’t add much to the pay­check

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