Dateline: Tokyo, Japan
The flight in from Hong Kong was about as smooth as one can get, even if the business class seats on Japan Airlines were a bit worse for wear.
I spent the weekend in Hong Kong meeting with some of the best and the brightest Members of our private mastermind and flew up to Tokyo this afternoon.
I’m humbled to have such successful Members from all over the world flying to our private events and sharing their expertise with each other.
As for my flight, despite having slightly higher expectations for the premium cabin, there is something uniquely special and fulfilling about Japanese service. They really take things to a new level of graciousness here.
And while my base city of Kuala Lumpur is a great city for foodies, Tokyo may just be the best food city in the world. (Istanbul may be a close second.)
I arrived into the city a bit late and started exploring around the Ginza neighborhood, where foreign restaurants are in abundant supply. However, there were few Japanese restaurants still open, and I eventually settled on a cramped, pub-style beef noodle place.
The chef, nice guy that he is, came out to greet me at the door and explain their unique process. You see, at these fast casual restaurants, expenses are kept to a minimum. The Japanese have a world-renowned infatuation with robotics and all kinds of new technology that can’t be missed.
So rather than hiring a hostess or a bunch of waiters, the restaurant merely put a vending machine outside the front door.
The chef, who spoke decent English, explained how to insert my money into the machine and push the button for the dish I wanted.
The fact that small, medium, and large sizes of the spicy beef noodle bowl are all the same price seemed a little more odd, but the self service concept is quite efficient overall.
This type of technology is everywhere in Japan. Like most developed east Asian cities like Taipei and Seoul, Tokyo has plenty of Family Mart and Circle K convenience stores all over the place. But Tokyo has an even greater abundance of vending machines dotted all over the city.
I couldn’t get ten feet out of the airport before I stumbled over a few different vending machines selling everything from bottled drinks to hot tea to toiletries.
If you’ve never been to Tokyo, you’ll just be walking down a city street and see a bunch of machines vending a large array of stuff you’ve never seen sold that way anywhere else.
All of this got me thinking about the $15 an hour minimum wage currently being demanded by workers in The Land of the Free and how it not only shows a total lack of economic education among the general population, but is just another danger sign that the US economy is nowhere near any kind of “recovery” and has plenty of triggers that could take it further.
I frequently talk about the concept of culture as an important economic indicator for the average investor. And just as we’ve discussed various theories that suggest the death of the west, a culture where minimum wage workers demand nearly doubling their pay overnight yet don’t see the writing on the wall is a problem.
The United States is a (relatively) wealthy country filled with people who have no idea why they’re wealthy.
The same goes for much of western Europe. To these people, some semblance of wealth is owed to them.
Now, I’m not saying that people working at McDonald’s have aspirations of living on Central Park South, but there is a certain sense of entitlement that is, not surprisingly, embraced by bankrupt politicians who see this issue as a way to retain power as the country sinks deeper into the economic abyss.
We all know why the politicians are on board with the “Fight for 15” and a $15 minimum wage. There are a lot of workers who stand to gain something from politicians willing to torch economic freedom in order to buy votes.
That is inherently the cultural problem in the west today. As long as you have more than the next guy, you’ll be viewed as “rich” and thus a candidate to have wealth taken from you.
But you would think someone could tell those picketing for a $15 minimum wage that restaurants in western Europe often provide insanely slow and grouchy service precisely because of high minimum wages that force restaurants with thin profit margins to keep staff to a minimum.
Sure, the one guy being run to death makes enough to rent a crappy apartment on his own rather than flop on a futon at his buddy’s house, but it also means three other people couldn’t get a job because the restaurant couldn’t afford to hire them.
That’s why some McDonald’s in European countries like Spain have already moved to automated ordering systems that allow one or two people to cook the food and hand it over the counter once the guest orders and pays for it.
Despite the fact that study after study shows that fast food restaurants can’t afford to absorb higher labor costs, and that low margins will force lay-offs and the introduction of labor-saving technology, labor unions and politicians can’t wait to get the government more involved in your business.
You may be asking why this matters to you. You don’t own a fast food restaurant nor are you employed by one.
The issue at hand is that western governments are hellbent on using their ever-expanding powers to regulate and legislate every aspect of your life, consequences to the economy be damned.
Here in Japan, Abenomics – the mind-bogglingly stupid economic plan based on printing a ton of money – tried to use a similar wave of public support to escape the economic malaise the country finds itself in.
Somehow, spending lots of money didn’t increase productivity nor give the Japanese economy a boost. Instead, the country is continually raising its sales tax and killing the Japanese yen; both are screwing every man, woman, and child in Japan who has to buy anything.
Rather than give the country a shot in the arm, the idea of throwing money around has done nothing but make everything more expensive for the population.
It took Japan awhile to figure out the the Abenomics model wasn’t going to save them, but people are starting to get the message. Unfortunately, it’s too late.
Politicians where you live are desperate to hold onto their power and will similarly say or do whatever it takes to keep the votes rolling in from their supporters. If getting votes from unions demanding $15 an hour requires them to trash the currency or make everything you buy more expensive, they won’t think twice about.
Eventually, every individual and every business will feel the impact. No matter what business you run, it will become more difficult, more expensive, and more bogged down in red tape if you keep your money parked in the west.
If you try to start a business, it will become increasingly difficult to do so, also.
And if you’re retired, your fixed income will buy less and less until you can’t afford the things you need.
The real issue at play here isn’t how much a guy flipping burgers makes. It is the idea that greedy politicians will throw you under the bus to pander to anyone they can to get re-elected.
That’s because those demanding a higher minimum wage aren’t exactly taking their case to the CEO of McDonald’s. Instead, they’re putting on a show for political capital.
If the politicians they are relying on can use the law to effectively steal from every business owner with minimum wage workers, then they can steal anything else from anyone else.
That concept of political pandering isn’t exactly new, but the base of people willing to take your money, trash your economy, and ruin your business for a few extra bucks on their paycheck is growing. Economies run on margins, and the minimum wage debate is just one of many that will chip away at the whatever fragile economy the western world has left.
Eventually, many of the $15 an hour fast food workers will be out of jobs, replaced by Japanese-style robots and vending machines that do their job without ever calling in sick. It’s easy to say that the problem will be solved at that point, but to do so is to ignore the massive damage to your own personal economy before the dust settles.
Because you know if politicians are willing to mandate a higher minimum wage for votes, they’ll also mandate nationalizing your pension, raising your taxes, and grabbing your wealth to buy off the same constituency.
