For all those dirty old Japanese men who are sick of seeing that human chunk of Italian ham Girolamo Panzetta on the cover of their beloved Leon, the brand new magazine Zino gives you 73-year old journalist Tahara Soichiro slouching on a rooftop, drinking the bubbly, wearing a dozen different shades of off-white. The guy oozes sex the way that most men ooze ooze. This Ole Granddad is so over-sexed that he doesn’t even bother to look at the hot white woman in the bikini standing right in front of him. Either that or he was photoshopped into the setting.

Zino comes to us from Kishida Ichiro — the media maverick and lothario who helmed Leon until he was asked to leave last year. Generally speaking, the content in Zino seems to be identical to Leon — high-end gear for sketchy old guys. Lots of reptile skin and huge watches. Opposed to the self-imposed racial segregation of Leon, however, Zino actually uses a few Japanese men as models, adhering to the widely-held belief that dudes are dudes as long as they have stubble.

Readers may not be screaming out for two rival versions of the same magazine, but apparently advertisers cannot resist the idea of a magazine targeted towards single and lecherous rich men who spend their Sosekis on luxury items instead of on wives and the results of their procreation.

And if you are thinking, hey, Zino is just “fronting,” check out the inside-cover ad: Hermès, baby. You can’t even afford to talk to guys who work in the Hermès stock warehouses.

Zino’s motto is “リッチを誇るな、センスで光れ！” — “Don’t be proud of being rich, dazzle ‘em with your good sense.” Nobody embodies these words better than Mr. Tahara Soichiro — that guy is as hot as the goddamn sun.

Update, September 2008: Zino sadly ceased publication a few months ago.

Last month, I attended a talk with an ex-bigwig from Seibu Mizuno Seiichi and downwardly-mobile market expert Miura Atsushi. They discussed how Tokyo University students of yore were terrible dressers. Back when Japan was a well-oiled machine built from top-to-bottom for the sole purpose of manufacturing-led export-based growth, Tokyo University (Todai) was the elite of elite institutions. Todai trains the government bureaucrats who essentially hold all of the political power and then retire into cushy board positions at the country’s top firms. Tokyo students thus had the career prospects, but in karmic exchange, lacked an eye for fashion and self-presentation. Spending the first sixteen years of your life in complete pursuit of memorizing population statistics, dates, and other meaningless numbers required for Confucian-style aptitude testing does not exactly make you a ladies man, let alone have the time to track down the latest duds from Van.

But times have changed. The two men noted that kids at elite institutions these days are not only good at book-learning but up with fashion, good with people, and killers with the ladies. (Or, gasp, are ladies.) Welcome to the rise of the hypermeritocracy — where the elite excel at everything.

This change in meaning of “elite” fits perfectly with the new employment system based to a higher degree on merit-based career promotion. (Depending on your philosophy, this is either ruining or saving Japanese capitalism.) Graduating from a top-tier school may get your foot in the door, but your pedigree alone will not guarantee you access to the top level positions within your own firm.

The data bears this out. In magazine President’s October 16, 2006 cover story on “Universities and Career Success” (「大学と出世」), there was a rank of universities on how many of the graduates become executives at leading companies. Over the last twenty years, things have drifted from a country ruled politically and economically by Todai graduates to one where private university graduates (especially Keio, Waseda, and Chuo) lead the pack. The following table from President illustrates this well.

Not only have the private universities completely overtaken the national universities of Tokyo and Kyoto, less of the premier companies’ executives are from the best universities in total. Either the elite university students are going into non-listed companies or the listed companies are promoting by merit — which may not match up perfectly to the university affiliation won through first-rate test-taking ability at the age 18. The new corporate system looks to be generally less elitist than the old Japanese system. Of course, rich parents would find it easier to get their dumb children into Keio through the escalator system, but these kids will not succeed in their companies without actual effort. And it’s not like Tokyo University admissions were that “fair” to start with. The juku system requires expensive private tutoring to pass entrance exams, making the whole idea that “anyone can get into Tokyo University” a crock.

As the economic system of promotion-by-talent gets nearer the American system, elitism based on academic pedigree also declines. This echoes the American business world, where most CEOs did not attend Ivy League schools (only 10% of the Fortune 500). So now that promotion will be based on a large set of skills — smarts, charisma, social awareness — it only makes sense that the most elite schools are starting to see “hypermeritocratic” kids fill their classrooms. The economic system no longer rewards the eggheads and bookworms, so why should the elite colleges be creating them?

In the middle of the 1990s, beer alone made up something like 75% of the liquor market in Japan. No surprise, really: most everyone around the world loves a cold tall one no matter whether the occasion is celebrating a rise in mutual fund portfolio value or suppressing the despair of losing a white-collar job to restructuring. Despite the fact that Japanese beer is excellent across-the-board, Japanese consumers have recently abandoned it in droves for fake “beer-flavored” malt-beverage substitutes: happoshu and fake-happoshu “third-category beer.” These fake beers now command about 25% of the alcoholic beverage market.

This is taste deflation in action: consumer budgets go down and sales of inferior goods go up. Pure-and-simple. (This has now led to a market gap at the top exploited by Suntory Premium Malts, but we will leave that topic for a different day.)

Fashion, however, has been different. These are not items that you put in your body but represent your social status and hierarchical ranking to society at large. Thanks to rising consciousness about socio-economic strata, the major European superbrands — Louis Vuitton, Gucci, Burberry, Christian Dior, and Hermès — have dominated the Japanese fashion scene for the last decade. But instead of being able to go head-to-toe in one brand like the ’80s — or even mid-’90s — young women can only afford to go generic for the shirts and skirts and then “class it all up” with a $2000 bag. But whether the appeal of these brands is “rational” (dependable and classic!) or “aspirational” (Roppongi Hills/Paris Hilton plastic-fantastic!), paying $2000 or more for a bag has been the de facto standard for a very long time. Maybe this year it’s Chloé and not LV, but still: time to take out a loan.

But watch out super luxury: last week’s issue of Weekly Toyo Keizai featured a long feature on “The Coach Miracle.” Many members of what used to be called the “middle-class” are now happy to buy a $400-$500 bag instead of shelling out for a $2000 one. Although the accompanying pictures to the article illustrate a much less fashion-forward, less glamorous crowd, Coach’s growth in the Japanese bag market is unquestionably strong: currently a 9% share, above Gucci, Hermes, and Chanel (LV is still 25%, natch).

Important to note that Coach is not seen as a classic luxury brand, but an “accessible luxury” (アクセシブル・ラグジュリー). Much more Polo than Prada in terms of cachet, with prices to match. More America than Europe — which is almost never a good sign of things to come.

Surely there are strategic business decisions and changes in fashion/taste that explain Coach’s rise, but one cannot help but think back to simple economic realities: buying a $2000-$3000 bag is a bit of an extreme investment at this point in time for a large class of people who have moderate incomes and little chance at wage raises. “Accessible” means having a “nice” bag and money left over to live life with the bag you just bought. And since boys do not care about brand labels anyway, why bother?

If Japanese men can accept that their 21st century life will involve the daily imbibing of vile forms of fake beer, why can’t women come down from fantasy land and stay within the price ranges of their budget limitations? With the economy moving as it is, taste deflation for middle-mass fashion is bound to happen at some point. And since LV is now so overexposed, the time has never been better for going “one-rank” down. I doubt, however, that things will stop at the Coach level. Bape destroyed the fashion market for men by making “fashion” into t-shirts and jeans, which ultimately opened the market for Uniqlo. If Coach says that “dressing up” can be mid-level luxury, then there goes the neighborhood.

I just read the OECD Economic Survey on Japan from this year which highlights the “key economic challenges” facing the nation over the next decade. This sentence from the conclusion generally sums it up:

While the Japanese economy is in its best shape since the early 1990s, the basis for comparison — the weak economic performance of the last decade — does not set the bar very high.

This report estimates Japan’s future growth rates at the meager 1.3% a year, and Japan will only keep up with the other countries’ per capita income gains if it can maintain high working hours (already 8% above the OECD average), increase labor force participation rates (which the low birth rate is making difficult), and boost labor productivity to 2.5% (Japan’s labor productivity is infamously poor).

Japan’s per capita income has fallen to 75% of that the United States, even though the per capita incomes of other OECD countries have been relatively stable. Increases in private consumption will only follow gains in income, which means that consumerism isn’t likely to return to early ’90s levels anytime soon.

The report sharply criticizes the new Japanese employment practice of hiring temporary “non-regular” workers at much lower salaries and less job security. Apparently, there is little difference in productivity between the regular and non-regular workers, and non-regular workers have a difficult time moving to regular employment. In other words, the male elite students hired as permanent employees get 60% larger salaries for doing essentially the same amount of work as those with less prestigious backgrounds. This will obviously create a substantial income disparity in the future. On top of that, most skills come not from the educational system, but from firms’ in-house training, which means that non-regular workers seriously lack human capital.

Greater female participation in the workforce could be beneficial to the economy, but the fact that women make up 2/3 of the lower-paid, non-regular workforce is not providing economic encouragement for their mobilization.

Another interesting statistic: Workers aged 15 to 24 show a 10.1% unemployment rate and more long-term unemployment than the other OECD countries.

What does this mean for Japanese pop culture? Consumerism will most likely not be on the rise anytime soon, so I would doubt that the fashion, music, and media markets are going to boom in the next decade. There will, however, be a new class of wealthy youngsters, and if they max out their pocket money, this could create a visible class-based rift in cultural consumption. Until now, pop culture and semi-subcultural practice in Japan have been defined predominantly through consumption, but a possible saving stroke would be the shift from shopping/buying as the main youth activity to non-commercial producing/creating. Tradition suggests that this shift is unlikely, but I would not rule it out.