Japan’s Young People Aren’t Getting Poorer, Analyst Claims

“Social insurance premiums are dragging down young people’s disposable income.”

The results showed that real disposable income for 20- to 34-year-olds reached its highest level ever in 2018–2020, surpassing even the bubble era.

As debate over social security heats up, such claims are common on social media. But a new study by a Daiwa Institute of Research Ltd. analyst challenges this narrative, Aya Shiota reported for Mainichi Japan.

In October, the institute’s chief researcher Shungo Koreeda published an estimate of real disposable income for young people over time, reflecting trends in social insurance premiums and wages.

Real disposable income is take-home pay after deducting taxes and social insurance premiums from gross income, adjusted for price fluctuations — a key indicator of living standards.

Koreeda calculated real disposable income from 1980 to 2024 for full-time male and female workers aged 20 to 34 without dependents, broken down into five-year age groups.

The analysis period starts before the late-1980s and early-1990s bubble economy, enabling comparison with today’s young people and their parents’ generation. Data sources included the Ministry of Health, Labor and Welfare’s Basic Survey on Wage Structure.

The results showed that real disposable income for 20- to 34-year-olds reached its highest level ever in 2018–2020, surpassing even the bubble era.

For women, the peak came in 2020, when a special 100,000-yen COVID-19 relief payment was distributed: 2.73 million yen for ages 20–24, 3.23 million yen for ages 25–29, and 3.38 million yen for ages 30–34 (approx. $17,500, $20,700, and $21,600 at current exchange rates).

For men, the peak for ages 20–24 was 2.95 million yen (approx. $18,900) in 2018, and for ages 25–29 it was 3.7 million yen (about $23,700) in 2019.

For men aged 30–34, the peak was earlier, at 4.44 million yen (roughly $28,400) in 1996.

The sluggish growth in this group is attributed to a “flattening wage curve,” where starting salaries have risen but pay increases with years of service have slowed.