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Japaninthe21stCentury Spring2017
RobertCroker,CJS,NanzanUniversity 1
Japan in the 21st Century
Robert CrokerJapanese Society II: Contemporary Japan
Center for Japanese StudiesNanzan University
1. Demographic Change: demography is destiny
population pyramid Review1. demographic change:
demography is destiny
population is fallingvery low birth rateageing populationinverted population pyramid
2. Economic Change: macroeconomic blues
Ohtake, F., Kohara, M., Okuyama, N, Yamada K. (2013). Growing inequalities and their impacts on Japan.
GINI Country Report Japan
Page 84
Figure 5.1: Real GDP per capita in Japan
Source: Federal Reserve Economic Data (U.S. Department of Labor, Bureau of Labor Statistics;
http://research.stlouisfed.org/fred2) Note: Annual, not seasonally adjusted. Unit is 2010 U.S. dollars.
Figure 5.2: Consumer Price Index for all items (index 2005=100)
Source: Main Economic Indicators (Organization for Economic Co-operation and Development)
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2010
U.S
. dol
lars
0
20
40
60
80
100
120
1970
-01-
0119
71-0
8-01
1973
-03-
0119
74-1
0-01
1976
-05-
0119
77-1
2-01
1979
-07-
0119
81-0
2-01
1982
-09-
0119
84-0
4-01
1985
-11-
0119
87-0
6-01
1989
-01-
0119
90-0
8-01
1992
-03-
0119
93-1
0-01
1995
-05-
0119
96-1
2-01
1998
-07-
0120
00-0
2-01
2001
-09-
0120
03-0
4-01
2004
-11-
0120
06-0
6-01
2008
-01-
0120
09-0
8-01
2011
-03-
01
real GDP per capita
Japaninthe21stCentury Spring2017
RobertCroker,CJS,NanzanUniversity 2
Ohtake, F., Kohara, M., Okuyama, N, Yamada K. (2013). Growing inequalities and their impacts on Japan.
government debt as % of GDPGINI Country Report Japan
Page 85
Figure 5.3: Government Debt as a % of GDP
Source: World Economic Outlook (International Monetary Fund)
Note. Gross debt consists of all liabilities that require payment or payments of interest and/or principal by the
debtor to the creditor at a date or dates in the future. This includes debt liabilities in the form of Special
Drawing Rights (SDRs), currency and deposits, debt securities, loans, insurance, pensions and standardized
guarantee schemes, and other accounts payable. Debt can be valued at current market, nominal, or face values.
http://research.stlouisfed.org/fred2/series/GGGDTPJPA188N.
5.2 Minimum Wage
The following sections summarize government policies related to inequality. Figure 5.4 shows that
the minimum wage has increased since 1997, stayed at the same level from 2001 to 2005, but
increased again from 2007. However, the relative level of the minimum wage to average wage in the
country—the Kaitz index—has not changed tremendously. Figure 5.5 shows the Kaitz index for males
and females, respectively. For males, the minimum wage level unchanged during 1980s, decreased
between 1990 and 1993, and then slightly increased after that. For females, it unchanged during
1980s, decreased largely between 1990 and 1993, stayed at the same level until 2004, and increased
after that. That is, through the entire period from 1980 till 2009, the relative level of minimum wage
is rather constant. The increase in the minimum wage is thought to have only small effects on
alleviating existing levels of income inequality (Kawaguchi and Mori, 2009).
0
50
100
150
200
250
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Review2. economic change:
macroeconomic blues
little real growth in the economylong-term deflationlittle growth in real wagesgrowing government debt – but not effectively
used to reduce poverty
3. Socio-economic Change: (not) sharing the pie
GINI Country Report Japan
Page 28
Figure 2.15: Proportion of non-standard workers among all employees
Source: The Special Survey of the Labour Force Survey (1984–2001), and Labour Force Survey (2002–present)
(both by Ministry of Health, Labour, and Welfare).
Note: The figure shows the ratio of non-standard workers to employees, excluding executives of companies or
corporations. Non-standard workers include part-time workers, contract employees, and casualized workers.
When discussing Japan’s labor market inequality, close attention needs to be paid to the wage gap
between part-time employees and full-time employees. Figure 2.16 shows the income inequality
between the two. During the period from 1980 to 2002, the hourly wage rate received by part-time
employees declined continually compared to that of full-time employees. In the 2000s, part-time
hourly wages appeared to increase slightly, but male (female) part-time employees are paid only half
(60%) as much as full-time employees. This slight increase has not mitigated large increases in the
share of non-standard workers either of men or women.
0
10
20
30
40
50
60
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
(%)
Total Male Female
number of ‘non-standard’ workers
Ohtake, F., Kohara, M., Okuyama, N, Yamada K. (2013). Growing inequalities and their impacts on Japan.
poverty rates by age
Ohtake, F., Kohara, M., Okuyama, N, Yamada K. (2013). Growing inequalities and their impacts on Japan.
GINI Country Report Japan
Page 36
Figure 2.23: Poverty rates calculated by disposable income
Source: Authors’ calculations using micro data taken from the NSFIE.
Note: The figure shows the ratio of the number of people whose income is less than or equal to half of the
national median income. For calculation, household income and consumption is divided by square root of the
number of household members.
0,00
0,02
0,04
0,06
0,08
0,10
0,12
0,14
0,16
0-4
5-9
10-1
4
15-1
9
20-2
4
25-2
9
30-3
4
35-3
9
40-4
4
45-4
9
50-5
4
55-5
9
60-6
4
65-6
9
70-7
4
75-
Pove
rty
Rate
1984 1994 2004
definition: poverty rates before taxes and transfers … and after taxes and transfers
OECD overall: before tax – highafter tax – much lower
Japan overall: before tax – lowafter tax - higher
over time:increasing inequality,
before tax and after tax
reducing the poverty rate
Japaninthe21stCentury Spring2017
RobertCroker,CJS,NanzanUniversity 3
definition: % of children living in households with income lower than 50% of the national median
Greece: 12.7%
Japan: high – 14.9%#9 in OECD
United States: very high – 23.1%highest in OECD USA
Spain
Italy
Japan
Canada
Luxembourg
United Kingdom
Australia
Belgium
France
Germany
Ireland
Switzerland
Austria
Sweden
Denmark
Norway
Netherlands
Finland
Iceland
23.1
17.1
15.9
14.9
13.3
12.3
12.1
10.9
10.2
8.8
8.5
8.4
8.1
7.3
7.3
6.5
6.1
6.1
5.3
4.7
0 5 10 15 20 25Child poverty rate (% of children living in households with equivalent income
lower than 50% of the national median)
(see Box 8: The public view). Life at 50% of median income in poorer countries like Bulgaria and Romania may not signify the same level of difference, or imply the same degree of social exclusion, as it does in Denmark or Norway. That said, it should also be noted that at very low levels of income even small differences can make a significant difference to opportunities and living standards.
Since the enlargement of the European Union to 25 countries in 2004 and then to 27 countries in 2007, this problem of ‘the meaning of the median’ has become more pressing. Cross-national comparisons in the European Union must now span a group of countries whose annual per capita incomes range from less than
$14,000 to around $85,000. A relative income poverty line based on 50% of median incomes will inevitably struggle to reflect this new diversity.
Figure 3 illustrates the problem. This shows, for example, that the 10 richest countries have poverty lines that are higher than the median incomes of the 10 poorest countries. This means that children who are below the relative poverty line in France or Germany may be significantly better off in actual living standards than children who are living at the median income level in Poland or Portugal.v Or to take another example, a child living at the relative poverty line in the Netherlands has double the income of a child living at the median income level in a country like Hungary (Figure 3).
Finally there is the worry that comparing relative child poverty rates on the basis of household incomes cannot take into account significant differences between countries in the cost of living and especially in the costs of essential goods and services such as health and child care. An income of $30,000 in country A, where such services are free or heavily subsidized, may imply a very different standard of living from the same income in country B where such items must be paid for at market rates.
In sum, a relative poverty line drawn at 50% of median income is an attempt to define a concept of poverty on which there is widespread agreement in principle – a concept which says that the poor are those who do not have access to the possessions, amenities, activities and opportunities that are considered normal by most people in the society in which they live (see Boxes 6, 8 and 9). But when using this yardstick to make comparisons between countries, it is probably better to restrict the comparison to those generally wealthier countries where living on incomes below 50% of median implies a similar level of risk of social exclusion. Figure 4, for example, restricts the comparison of relative child poverty rates to the 20 OECD countries with annual per capita incomes of more than $31,000.
Deprivation doubts These concerns and problems have led to increasing pressure for the relative income measure to be supplemented by a more direct measure of child poverty.
Within individual economically advanced countries, direct measures of child deprivation are sometimes available. They have been deployed, for example, in Finland, Germany, Greece, Ireland, the Netherlands, Sweden, and the United Kingdom.vi Internationally, the Child Deprivation Index presented in Figure 1a is the first attempt to meet this need. As already noted, it is made
Note: Data refer to children aged 0 to 17.Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009, PSID 2007. Results for Japan are from Cabinet Office, Gender Equality Bureau (2011).
Fig. 4 A league table of relative child poverty, selected OECD countries
I N N O C E N T I R E P O R T C A R D 1 0 1 1
relative poverty rate - childrendefinition: relative child poverty rates beforetaxes and transfers and after taxes and transfers
Australia: minus 18%Canada: minus 11%
Belgium: minus 9%The Netherlands: minus 6%Denmark: minus 6%
United States: minus 2%
Japan: minus 1%
Spain: minus 2%Italy: minus 0.5%Greece: plus 3%
Greece
Italy
Japan
USA
Spain
Switzerland
Latvia
Romania
Poland
Bulgaria
Portugal
Estonia
Lithuania
Slovakia
Cyprus
Denmark
Netherlands
Belgium
Sweden
Canada
Malta
Iceland
Luxembourg
Germany
Slovenia
France
Norway
Czech Republic
Austria
New Zealand
Australia
Finland
United Kingdom
Hungary
Ireland
Child poverty rate(% of children living in households with income lower than 50% of the national median income)
0 10 20 30 40 50
large part the result of global economic trends. But that does not mean that it is inevitable. It is within the power of every government in the OECD to set realistic targets for reducing relative child poverty and to put in place the policies and the monitoring systems required to meet those targets.xii Figure 1b shows that a realistic target for the countries with relative child poverty rates below 10% would be to renew the struggle to reduce the rate to 5% or lower. Similarly, the 12 countries with rates between 10% and 15% should aim at lowering relative child poverty below 10%. The 8 countries currently with rates of 15% to 25% have the capacity to bring the rate below the 15% level as an essential first step.
Announcing such targets is of course not enough. It is now more than 20 years, for example, since the Government of Canada announced that it would “seek to eliminate child poverty by the year 2000.” Yet Canada’s child poverty rate is higher today than when that target was first announced.xiii In part this is because the commitment was not backed by a compelling political and public consensus or by any firm agreement on how child poverty should be defined and monitored. Targets can only be a first step.
In the past, the European Commission has done much to help EU countries to develop common indicators for the measurement of child poverty and to develop plans for its reduction (see Box 7: The European Union: 2020 vision). But since the economic crisis began, child poverty appears to have slipped down the Commission’s agenda. Children barely feature, for example, in the Europe 2020 strategy. In particular, the Commission appears reluctant to publish cross-national data on falling government expenditures for children and families. Later this year (2012), the Commission is due to make proposals to member states on child well-being. Those proposals should include targets for specific reductions in child poverty by the end of this decade.
Fig. 8 Relative child poverty rates before taxes and transfers (market income) and after taxes and transfers (disposable income)
Notes: For each country and for both income definitions, poverty calculations are based on a poverty line set at 50% of the national median disposable income. Countries are ordered by decreasing percentage of poverty reduction achieved. ‘Taxes and transfers’ takes into account all income taxes paid by households and all benefits that directly affect household incomes (i.e. not including in-kind or near-cash benefits).Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009 and PSID 2007. Results for New Zealand are from Perry (2011) and refer to 2010. Results for Japan are from Cabinet Office, Gender Equality Bureau (2011).
before taxes and transfers after taxes and transfers
1 8 I N N O C E N T I R E P O R T C A R D 1 0
Greece
Italy
Japan
USA
Spain
Switzerland
Latvia
Romania
Poland
Bulgaria
Portugal
Estonia
Lithuania
Slovakia
Cyprus
Denmark
Netherlands
Belgium
Sweden
Canada
Malta
Iceland
Luxembourg
Germany
Slovenia
France
Norway
Czech Republic
Austria
New Zealand
Australia
Finland
United Kingdom
Hungary
Ireland
Child poverty rate(% of children living in households with income lower than 50% of the national median income)
0 10 20 30 40 50
large part the result of global economic trends. But that does not mean that it is inevitable. It is within the power of every government in the OECD to set realistic targets for reducing relative child poverty and to put in place the policies and the monitoring systems required to meet those targets.xii Figure 1b shows that a realistic target for the countries with relative child poverty rates below 10% would be to renew the struggle to reduce the rate to 5% or lower. Similarly, the 12 countries with rates between 10% and 15% should aim at lowering relative child poverty below 10%. The 8 countries currently with rates of 15% to 25% have the capacity to bring the rate below the 15% level as an essential first step.
Announcing such targets is of course not enough. It is now more than 20 years, for example, since the Government of Canada announced that it would “seek to eliminate child poverty by the year 2000.” Yet Canada’s child poverty rate is higher today than when that target was first announced.xiii In part this is because the commitment was not backed by a compelling political and public consensus or by any firm agreement on how child poverty should be defined and monitored. Targets can only be a first step.
In the past, the European Commission has done much to help EU countries to develop common indicators for the measurement of child poverty and to develop plans for its reduction (see Box 7: The European Union: 2020 vision). But since the economic crisis began, child poverty appears to have slipped down the Commission’s agenda. Children barely feature, for example, in the Europe 2020 strategy. In particular, the Commission appears reluctant to publish cross-national data on falling government expenditures for children and families. Later this year (2012), the Commission is due to make proposals to member states on child well-being. Those proposals should include targets for specific reductions in child poverty by the end of this decade.
Fig. 8 Relative child poverty rates before taxes and transfers (market income) and after taxes and transfers (disposable income)
Notes: For each country and for both income definitions, poverty calculations are based on a poverty line set at 50% of the national median disposable income. Countries are ordered by decreasing percentage of poverty reduction achieved. ‘Taxes and transfers’ takes into account all income taxes paid by households and all benefits that directly affect household incomes (i.e. not including in-kind or near-cash benefits).Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009 and PSID 2007. Results for New Zealand are from Perry (2011) and refer to 2010. Results for Japan are from Cabinet Office, Gender Equality Bureau (2011).
before taxes and transfers after taxes and transfers
1 8 I N N O C E N T I R E P O R T C A R D 1 0
Greece
Italy
Japan
USA
Spain
Switzerland
Latvia
Romania
Poland
Bulgaria
Portugal
Estonia
Lithuania
Slovakia
Cyprus
Denmark
Netherlands
Belgium
Sweden
Canada
Malta
Iceland
Luxembourg
Germany
Slovenia
France
Norway
Czech Republic
Austria
New Zealand
Australia
Finland
United Kingdom
Hungary
Ireland
Child poverty rate(% of children living in households with income lower than 50% of the national median income)
0 10 20 30 40 50
large part the result of global economic trends. But that does not mean that it is inevitable. It is within the power of every government in the OECD to set realistic targets for reducing relative child poverty and to put in place the policies and the monitoring systems required to meet those targets.xii Figure 1b shows that a realistic target for the countries with relative child poverty rates below 10% would be to renew the struggle to reduce the rate to 5% or lower. Similarly, the 12 countries with rates between 10% and 15% should aim at lowering relative child poverty below 10%. The 8 countries currently with rates of 15% to 25% have the capacity to bring the rate below the 15% level as an essential first step.
Announcing such targets is of course not enough. It is now more than 20 years, for example, since the Government of Canada announced that it would “seek to eliminate child poverty by the year 2000.” Yet Canada’s child poverty rate is higher today than when that target was first announced.xiii In part this is because the commitment was not backed by a compelling political and public consensus or by any firm agreement on how child poverty should be defined and monitored. Targets can only be a first step.
In the past, the European Commission has done much to help EU countries to develop common indicators for the measurement of child poverty and to develop plans for its reduction (see Box 7: The European Union: 2020 vision). But since the economic crisis began, child poverty appears to have slipped down the Commission’s agenda. Children barely feature, for example, in the Europe 2020 strategy. In particular, the Commission appears reluctant to publish cross-national data on falling government expenditures for children and families. Later this year (2012), the Commission is due to make proposals to member states on child well-being. Those proposals should include targets for specific reductions in child poverty by the end of this decade.
Fig. 8 Relative child poverty rates before taxes and transfers (market income) and after taxes and transfers (disposable income)
Notes: For each country and for both income definitions, poverty calculations are based on a poverty line set at 50% of the national median disposable income. Countries are ordered by decreasing percentage of poverty reduction achieved. ‘Taxes and transfers’ takes into account all income taxes paid by households and all benefits that directly affect household incomes (i.e. not including in-kind or near-cash benefits).Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009 and PSID 2007. Results for New Zealand are from Perry (2011) and refer to 2010. Results for Japan are from Cabinet Office, Gender Equality Bureau (2011).
before taxes and transfers after taxes and transfers
1 8 I N N O C E N T I R E P O R T C A R D 1 0
government and child poverty rates
The Face of Poverty
Relative poverty rate:
single-parent households = 54.6%(mostly headed by mothers)
average family income = 2.43 million yen(= US$ 20 000)
families with both parents = 6.73 million yen( = US$ 57 000)
Food relief groups plan nationwide network to address growing poverty. The Japan Times (November 12, 2015).
Education
High school attendance:general population = 98.4%children living in poverty = 90%
University attendance:general population = 51%children living in poverty = 20%
Hoffman, M. Adding looming poverty to list of seniors’ woes. The Japan Times (August 15, 2015).
Review3. socioeconomic change:
(not) sharing the pie
steady employment rates for males and femalesunemployment rates sometimes higher for youth
higher salaries for men than womenconstant salaries for older workers falling salaries for younger workers
increasing number of ‘non-standard’ workers
Review3. socioeconomic change:
(not) sharing the pie
increasing poverty in 20s to mid-40sfalling poverty for older, retired workers
higher salaries and lower poverty in central Japan
growing perceptions of inequalitymore people on welfare, but mostly older peoplegovernment policies do not reduce young
povertyhigh relative poverty for children