Class 4 handout blog

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)

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lars

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real GDP per capita




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).

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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


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.

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(%)

Total Male Female

number of ‘non-standard’ workers


poverty rates by age



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.

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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



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

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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)

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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


0 10 20 30 40 50








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


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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