Transfer of Purchasing Power and Silent Equilibrium: The Structural Reality Left by Monetary Easing for Workers - 12/29/2025

Abstrct

Japan's monetary policy over the past decade or more has improved nominal employment indicators while also functioning as a massive redistribution machine, shifting workers' purchasing power to capital. This paper logically elucidates the hidden cost-pass-through mechanism behind the policy and why this situation has been maintained as "equilibrium."

Keywords

Real wages, dilution of currency value, cost externalization, debt reduction

Understanding the "discrepancy" between numerical improvements and perceived quality of life

During the Abenomics and quantitative easing periods, indicators such as rising stock prices and falling unemployment rates were frequently presented as evidence of economic success. However, the sense of discomfort felt by many workers that "there was no sense of economic recovery" was not merely subjective, but the result of mathematical inevitability.

The essence of this policy was to intentionally devalue the currency by explosively increasing the supply of the yen. A depreciating currency boosts the profits of exporting companies and the wealth of asset holders. However, rising import costs drive up the prices of necessities, reducing the relative value of "labor wages." In other words, rather than increasing the wealth of society as a whole, household purchasing power was "transferred" to corporate profits and government debt reduction.

The Role of "Trickle-Down" Discourse: The theory that "if the rich get richer, it will eventually trickle down to the lower classes" served as the logical backbone for facilitating this transfer.

At first glance, this theory appears to pursue the universal interest of "growing the pie for society as a whole." However, given real-world constraints, companies retained profits internally in preparation for future uncertainties, and workers were offered "maintained employment" as a form of compensation.

Importantly, the definition of "success" proposed by experts was fixed solely on "nominal figures," not on workers' standard of living. Even when predictions turned out to be wrong, the flaws in the theory itself were always concealed with explanations like "insufficient implementation" or "external conditions worsened." This created an asymmetry: the risk was always borne by workers in the real economy, while the proponents of the theory bore no costs.

"Hypothermic Equilibrium" Postpones Pain

The Japanese economy has now reached a stable equilibrium point. This is a state in which the system is kept alive by gradually impoverishing everyone equally while avoiding an explosive collapse.

If we think of this as a story, we are like aboard a "slowly sinking ship." Rapid repairs would require painful decisions, such as disembarking some passengers (eliminating inefficient companies). However, because no one wanted to take responsibility, the choice was made to gradually dump the cargo (national savings and future purchasing power) into the sea to slow the ship's sinking.

This strategy is socially acceptable because it avoids the visible pain of bankruptcies and unemployment in the short term. However, it comes at the cost of eroding purchasing power for generations to come and rigidifying the industrial structure.

The Consequences of Structural Stagnation

In the end, the experiment in quantitative and qualitative monetary easing has brought about a long-term, structural system of exploitation for workers in exchange for the "minimum guarantee of survival" of securing sufficient employment.

While workers are relieved that their nominal salaries remain unchanged or even increase slightly, they continue to pay the "invisible tax" of a depreciating currency. This structure is the result of extremely cold-hearted optimization that will continue until the government's debt problem is resolved or the nation's surplus assets are depleted. What we are facing is not a temporary recession, but a rigid economic structure in which someone's future is continually determined for someone else's benefit.