That is because of population aging. Despite the US importing effectively endless amounts of young people, per capita income growth for working age population since the 1990s has been identical between US and Japan. I am unable to say why exactly but it should be obvious.

It is important to note, however, that the starting point is very different. The idea of employees robbing those evil shareholders sounds good but has resulted in capital markets that effectively do not function. Tidying up that mess will not be simple and improving equity markets will go a long way.

Also, the structure of Japan is a function of US policy after WW2 to dismantle the zaibatsu. In every single other historical case that I am aware of the result of "employee-friendly" policies has resulted in the kind of permanent underclass that people fear, incorrectly, that AI will lead to (i.e. Germany). It is a known bad idea. Japan avoided this because all the wealthy people's assets were taken, this didn't happen in other countries (i.e. Germany) which led to significant financial instability/risk/inequality (Germany also has inequality within a completely stagnant economic system, which is different from inequality in a system where the composition of wealthy people is continually changing...Germany's billionaires are a combination of people who mysteriously got rich in the 1930s very quickly and people who have been rich since the 10th century).

Japan is interesting but it is a complete outlier. Even with their relatively good relative economic performance, they could be producing absolute-terms growth that is double or even quadruple where it is now. Comparing middling economies like Japan or Western Europe with countries growing the same rate and per-capita incomes that are double is a misunderstanding of potential. Average economic performance should be double the US consistently for multiple decades.