I live in the U.S but I am Asian. When I visit Asian countries I’m always surprised that food overall (groceries and restaurants) tends to be cheaper, even in wealthier countries like Korea and Japan. Even without tipping culture they seem to be able to pay their workers and keep prices low? How do they do it?
In: Economics
Cost of labor is a large part of it. You don’t have to pay cooks, support staff, wait staff, etc as much.
Even though Japan is one of the wealthier countries in Asia, the average income is only around half the average US income.
So the answer is just that for someone actually working and living in Japan, the food is not really that much cheaper for locald in relation to the income as it seems
To compare prices between countries you need to use the labor time an average employ has to spend to earn the money to get the item.
This way the differences often shrink significantly.
High loans make high prices,
high prices makes higher loans.
If you compare labor time you will see that a roman soldier 2k years ago got the same as today.
Labour but more importantly food quality of raw ingredients is also less. All the prime stuff gets exported
Different foods are different prices. For example a pizza in Asia is considered fine dining.
They also charge a lot for steak. Meat is considered a treat in Japan while we eat meat everyday.
What state are you in? Food prices will vary wildly from San Fran / Boston to middle of nowhere Wisconsin
This is pretty straightforward. Cost of goods to grow food is pretty low because if we’re being a little reductive you just need dirt, water, and seed or breed. All those things are cheap.
What can quickly get expensive is human labor. We’re not just talking about the farmer, but we’re talking about every bit of human labor along the way. People plant seeds or breed livestock. People water and feed their product whether its crop or livestock. People process the crop or the livestock when it is ready to go to market. People distribute the product to market.
When you’re buying a product in an expensive locale like the US, a lot of those steps that happened along the way required labor from people in those more expensive locales. When you’re buying a product in an inexpensive locale roughly the same steps all still happened, but they were paying for labor from that inexpensive market.
Think of it this way. You’re in a grocery store. You buy a bag of rice. That bag of rice was brought into the store by a trucker driver, then shelved by a stock boy, and now as you’re at the counter it is bagged by a cashier. All those people want to be able to afford their own bag of rice at some point too because they have to eat but they also have to be able to afford rent, power, water, or whatever they need in order to live wherever this store is. If this store is in Los Angeles then that truck driver, stock boy, and cashier are all going to ask for higher compensation than they would if this store was in rural Korea because cost of living is lower in rural Korea.
TL DR; food is cheaper in those locales because labor is less expensive in those locales, and labor is less expensive in those locales because cost of living (including cost of food) is less expensive. If that sounds circular then yeah, that’s how economics works.
Because they pay their workers dogshit, basically.
In Malaysia I think the minimum wage is like 1.2usd.
It’s just the culture competition and density in US, I have relatives who operate Chinese restaurants in couple states, their margins are way higher than in Japan or China.
“In Asia” is really not an ELI5 question, because Asia has so many different diverse countries and societies that a one-size-fits-all answer isn’t really possible. However, since you asked about Japan, I’ll talk about Japan. This answer is specifically only about Japan and not about any other countries.
The thing about prices is that they are affected by inflation. Inflation is mostly caused by governments adding money to the money supply, which causes the value of commodities to increase relative to the value of money (more properly, the value of money decreases, but when you look at commodity prices it looks like the value of commodities increase, when that’s not actually what happens, but I digress). In the West, most central banks agree that an inflation rate around 2% per year is “healthy”, according to an economic philosophy known as Keynesianism (you can look that up on your own time, I won’t get into it here).
Note that this 2% is compounded. I’ll get back to why this date is important in a moment, but in the 34 years since 1990, at a 2% compounded inflation rate, prices have increased by roughly 97%; this is assuming “healthy” or “target” inflation, not including abnormalities such as Covid. Put another way, due to planned government monetary expansionism (and not accidental or catastrophic unplanned emergencies), prices of commodities have doubled in the last 34 years.
Conversely, [here’s some data from Japan](https://www.macrotrends.net/global-metrics/countries/JPN/japan/inflation-rate-cpi#:~:text=Japan%20inflation%20rate%20for%202022,a%200.52%25%20decline%20from%202018.). You can see from this chart that not only has Japan’s annual inflation been significantly below 2% for the period between 1990 and today (actually roughly 1992), it has in fact even been in the negative for many of those years, as low as -1.35% in 2009. This means Japan’s currency has basically not undergone any inflation since 1990 (ok, 1992). While prices have doubled in North America at 2% inflation over 34 years, prices in Japan have remained constant, which is why commodities in Japan are half as expensive.
Note, however, also, as others have said, that wages in Japan have been likewise depressed. A salary of 10 million Yen per year (roughly $100,000 in equivalent purchasing power, roughly $65,000 USD foreign-exchange-adjusted at current rates) is considered exorbitantly high in Japan; such a salary would barely be middle class in the USA. So it’s all relative. This does make Japan an awesome travel destination, though, as you can make a Western salary and then buy things at half price on vacation.
Latest Answers