One more 2023 story about living in Tokyo, mainly from a Tokyo Shimbun article published on Dec. 14. Counter-intuitively (if you read some of the more recent posts on this blog), statistics show that the number of households with children is rapidly increasing in the city’s 23 wards, and that more than half of these households have annual incomes that exceed ¥10 million. More to the point, between 2017 and 2022, the number of households in the 23 wards where the breadwinner(s) is in their 30s increased by 20 percent, with median income being ¥9.86 million. The main reason for the increase is the improved daycare situation. Remember some years ago when the main story about living in Tokyo was the dire shortage of slots in daycare centers? With the rapid rise of double income households, daycare became a make-or-break consideration for living in the capital, because there weren’t enough services or the services that were available were inconvenient. That problm has all but been solved. According to a 5-year survey conducted by the interior ministry, since 2017 the household income of married couples with children has increased, with couples in their 30s showing the largest increase, and those living in the 23 wards saying their incomes have increased the most. The median income nationwide of households whose breadwinners are in their 30s is now ¥6.86 million, which represents a 13.2 percent increase from 2017 to 2022. However, the increase for the same demographic in the 23 wards was 23.4 percent. 

The main change over time is the predominance of double-income households with kids (as opposed to the derided demographic DINKS: double income with no kids). In the past, single-income households were the norm in the 23 wards, and it has been the availability of convenient daycare in central Tokyo that has attracted more double income households, which, as a block, has lifted the median income level in Tokyo. In 2017, 20 percent of all households nationwide that were waiting for a daycare opening were in Tokyo, accounting for 5,665 children. In 2022 the number of children in Tokyo on waiting lists had dropped to 32. According to one research company, income has increased on average for households with parents in their 30s at a much greater rate than for previous generations, owing to this combination of double incomes and available daycare. But at the same time the cost of living, especially in the 23 wards, has skyrocketed. Young persons with stable employment who desire to live in Tokyo and raise a family find that they are being priced out of their dream and alter their plans accordingly, with ¥10 million being the level that determines their choices. They think that anything less will make having a family in Tokyo impossible. Tokyo Shimbun’s conclusion is that, unless employers “give up their idea of how to compensate their labor” there is no way that the birth rate will ever be increased. This is probably a simplistic way of looking at the issue, but it sounds logical. 

And by cost of living we really mean the cost of real estate. One realtor told Tokyo Shimbun that more households with children are leaving Tokyo for the suburbs. The trend has always been the same, even during the pandemic: Single new college graduates find employment in the capital and move there, but once they marry they leave the city for the surrounding prefectures in order to have a family. Most of the married people in their 30s who remain in Tokyo have always lived there, meaning they probably already have a home. 

However, the effect of double incomes in Tokyo has had another, less remarked upon effect. Companies that typically transferred employees when they reached a certain level of promotion are now reviewing that system because if the employee’s spouse is also a full-time regular worker for a different employer the employee will be more reluctant to accep a transfer. In the past, such employees would be the sole breadwinner, but not any more. Starting last October, MUFG Trust Bank launched a new system wherein employees who agree to a transfer receive a no-strings ¥500,000 subsidy. Mizuho Bank’s compensation system for transfers is reported to be even more. And when the employee in question is living in Tokyo, the situation becomes even more difficult, since in order to live there a couple needs a combined income of at least ¥10 million. If either spouse is transferred, it will greatly affect their living situation regardless of how they choose to deal with it. If they decided to transfer as a family, one spouse will necessarily have to quit their job, and if they own a condo in Tokyo they will likely have to rent it out. If the family decides to remain in Tokyo while the affected spouse leaves on their own, the burden on the remaining spouse may be exponentially greater than it would be if they did not have a full-time regular job. What this means for the future could be a major shift in employer practices, meaning in order to secure good personnel companies may have to forego their usual transfer policies. Whatever you think of such policies, they tend to be the norm, so the impact could be considerable.