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Phrase: Race to the bottom
A race to the bottom happens when companies, countries, or organizations try to win more business by lowering their standards, prices, or quality.
They hope to attract more customers or investments, but this kind of competition usually ends up hurting everyone.
This is what had been happening in Japan for 40 years until just a few years ago.
Prices either remained stable decade after decade or decreased.
A race to the bottom occurs when different groups undercut each other, or, in Japan’s case, are afraid of raising prices to match operating costs out of fear of upsetting customers.
For example, if two companies are selling similar products, they may continue to lower their prices to increase sales.
This can become a race to the bottom, where both companies end up with very low profits.
Governments can also be part of a race to the bottom.
Sometimes, countries try to attract foreign businesses by lowering taxes and reducing regulations.
While this may bring in new companies, it can also harm workers and the environment.
In the long run, a race to the bottom hurts the economy and society.
Remember, in a race to the bottom, prices fall.
Falling doesn’t hurt; landing after the fall hurts.
That’s why Japan is in a world of hurt right now.
After forty years, Japan’s race to the bottom is over, but the challenges are just starting.
Salaries and prices are rising, causing sticker shock and hardship for many people.
or context, the average person in Japan has only about one-third the wealth of someone in Canada or the United States.
Japan has reached rock bottom of the abyss and now needs to climb out.
Flesch-Kincaid Readability Test
This post is understandable by someone with at least an 8th-grade education (age 13 – 15).
On the Flesch-Kincaid reading-ease test, this post scores 66.
The easier a passage is to read, the higher the score on a scale of 0 – 100.
