Inequality In Japan

[Mulboyne]

[Mulboyne]

More on income inequality:

Mainichi: Wealth, poverty and the shrinking middle class

President (7/3) a glossy bimonthly read by business executives, is the Japanese version of Fortune magazine. In the latest issue, Atsushi Miura, of Culture Studies, a Tokyo-based think tank, provides an analysis of household income over the past five years. The results are unmistakable: Japan is shifting from a society where the overwhelming majority of households once considered themselves middle class, to one in which clearly pronounced classes, including the very rich, the affluent, and those less fortunate -- such as temp-help staff who carry home 2 million yen a year -- are relegated to the bottom rungs...more...

[Mulboyne]

The OECD, late and unhelpful as usual:

Japan Times: OECD concerned by Japan's income gap

The Organization for Economic Cooperation and Development expressed strong concern Monday about the widening income disparity in Japan at a meeting focusing on the Japanese economy, a government official said. The Paris-based policy coordination body for the world's leading economies plans to release a report on the Japanese economy on July 20. One of the six chapters in the report is expected to cover the issue of the widening income gap, according to the official. "I think it's the first time that one full chapter will be dedicated to the disparity issue," the official said.

During the meeting, OECD officials said Japan had previously been regarded as a society in which there was little income inequality but warned that the income disparity among workers has recently been widening. The OECD thinks Japanese companies are finding it difficult to dismiss permanent workers due to insufficient legislation on layoffs and are increasingly relying on nonpermanent workers, the official said. "Protection on permanent workers is too strong," an OECD official reportedly said. Japanese participants for their part said that one of the reasons for the widening income gap is the graying population and that the income disparity among workers will probably narrow if the economy picks up.

[Greji]

The OECD, late and unhelpful as usual:

"....the income disparity among workers will probably narrow if the economy picks up...."

Japan Times: OECD concerned by Japan's income gap

IF the economy picks up! The dog would have caught the rabbit IF he hadn't have stopped to take a shit!

Their rationale still continues to amaze me!

[otakuden]

ditto. we're seeing the same thing here in the US which is basically the slow disappearence of the working middle class. shoot, the middle class in general - lower, average, and upper. i grew up in the middle working class and learned to appreciate the rewards of working hard for a living i was comfortable with and still able to get away and have fun. the middle class is still there, but unappreciated and being outsourced/replaced/left to whither away and die while our economy sinks further and further. if one looks to history (cause, stupid that humans are, we repeat the same mistakes over and over) we're not exactly on an encouraging path.
and these have been the ramblings of me

[Greji]

ditto. we're seeing the same thing here in the US which is basically the slow disappearence of the working middle class.

Hell, that's easy to fix. Just lower the minimum wage and that'll put everybody above the poverty line. They still want have anything to eat, but at least they can brag that they're middle class!

[otakuden]

Hell, that's easy to fix. Just lower the minimum wage and that'll put everybody above the poverty line. They still want have anything to eat, but at least they can brag that they're middle class!

?i'm confused?
the minimum wage is below the poverty line. a minimum of $8 wage would bring the poor to the poverty line, but not above it. i equate the middle class to the working class (trades, commerce, agriculture ,etc) which is, in a sense, the meat holding it all together. it's not to say poverty should exist in a prosperous economy, but when u have a bloated/bloating upper class, poor class getting poorer, and a disapearing middle class inbetween, things start to fall apart in a not good way.
but i espouse
i say, gimme a revolution, damnit!!!

[Greji]

i say, gimme a revolution, damnit!!!

You can have it. Just hold it in a country where I ain't resident!

[Taro Toporific]

Full text because this link will go dead in a couple of hours
[SIZE="3"]
Japan ranks 2nd worst among OECD nations in relative poverty[/SIZE]
TOKYO, July 20 KYODO
Japan ranked second worst among advanced economies in 2000 in terms of the relative poverty rate partly because non-regular workers with low wages increased amid the prolonged economic slump, the Organization for Economic Cooperation and Development said Thursday.
The proportion of the population living in relative poverty, defined as less than one-half of the median household disposable income, came to 13.5 percent in 2000, the second highest among OECD members following 13.7 percent in the United States, the OECD said in a survey on the Japanese economy.
''Rising income inequality and the increasing proportion of the population in relative poverty threaten to weaken the consensus for further economic reforms,'' the OECD said, dedicating an entire chapter in the annual survey to Japan's disparity issue.
The Paris-based policy coordination body for advanced economies attributed the widening income gap to the nation's graying population as well as an increase in non-regular workers.
''Population ageing is partly responsible for boosting inequality as it raises the proportion of the labor force in the 50 to 65 age group, which is characterized by greater wage variation,'' the OECD said.
''However, the key factor appears to be increasing dualism in the labor market,'' it said. ''The proportion of non-regular workers has risen from 19 percent of employees a decade ago to over 30 percent.''
Japan has finally emerged from an extended period of economic stagnation following the collapse of the asset price bubble in the early 1990s, but must address such challenges as rising income inequality and increasing population in relative poverty in order to sustain robust growth over the medium term, the OECD said.
A comprehensive approach, including reducing employment protection for regular workers and thereby weakening the incentives of firms to hire non-regular workers, would be required to reduce labor market dualism, it said.
Additionally, it is important to increase the coverage of temporary workers by social insurance and to enhance the employment prospects of non-regular workers, the OECD stressed.
The report also pointed out that more than half of single working parents were in relative poverty in 2000, compared with an OECD average of around 20 percent.
Significant poverty among single parents is a factor boosting the child poverty rate to 14 percent in 2000, well above the OECD average, it said.
''It is essential to ensure that children in low-income households have adequate access to high-quality education to prevent poverty from being passed to future generations,'' the report said.
Among other issues, the OECD said Japan must achieve a definitive end to deflation and successfully implement an effective monetary policy framework.
The OECD urged the Bank of Japan to be cautious in raising short-term interest rates. ''A significant rise in market interest rates that is too early or too large would pose important risks to both economic activity and the fiscal situation,'' it said.
The BOJ ended its zero-interest-rate policy July 14, raising the unsecured overnight call money rate to 0.25 percent from zero for the first hike in six years.
Japan must also strengthen its integration into the world economy to benefit more fully from globalization, the OECD said.
''Accelerating productivity growth also requires making fuller use of goods, services, capital, technology and human resources from abroad,'' it said.
The OECD urged Japan to promote its efforts to rebuild strained national finances by reducing spending further and broadening the bases of personal and corporate income taxes as well as some increase in the consumption tax from the current 5 percent.
As a medium-term fiscal consolidation strategy, Japan needs to attain a primary budget surplus of between 0.5 percent and 1.5 percent of gross domestic product, the OECD said.
Japan's government aims to achieve a surplus in the primary balance by fiscal 2011 at the national and local levels, a scenario in which expenditures, excluding debt-servicing costs, would be covered by revenues without relying on debt.
==Kyodo

[Mulboyne]

Asahi: White paper on labor, economy shows income gap widening

The disparity in incomes among employees in the same age groups continues to widen due to the increasing use of nonpermanent staff and the introduction of performance-based wage systems, a government report said Tuesday. In its white paper on labor and economy, the Ministry of Health, Labor and Welfare said that more than 20 percent of workers in their 20s earn less than 1.5 million yen annually. But those drawing 5 million yen or more in the same age group are rising. The report said the disparity in monthly income among permanent workers in their late 40s was now as much as 300,000 yen.

... It noted that the use of nonpermanent staff between the ages of 20 and 24 had increased threefold to 31.8 percent in 2002 from 10.7 percent in 1992. Similarly, the figure for nonpermanent staff aged between 25 and 29 rose from 11.6 percent to 22.7 percent. At the same time, the percentage of workers in their 20s who earn less than 1.5 million yen annually increased to 21.8 percent from 15.3 percent in 1992. In fact, the percentages of workers in their 20s earning 1.5 million yen or more but less than 4 million yen annually in 2002 was lower than the 1992 figure. The report noted that 2.9 percent of working people in their 20s were drawing salaries of 5 million yen or more in 1992. By 2002, the figure had risen to 3.2 percent, a further indication of the widening income disparity among young people...more...

[Mulboyne]

Interesting comment from Andrew Smithers at the end of this article:

FT via Yahoo: Corporates to become top tax payer in Japan

The amount of corporate tax paid by Japanese companies is for the first time in 18 years likely to exceed the amount of income tax paid by individuals, highlighting the role corporate profits have had in underpinning Japan's lengthy recovery...
...Andrew Smithers, an economist at London-based Smithers & Co, says in a recent report on Japan's economy that the swing to corporate profits will need to be reversed in order to bolster domestic consumption. He argues that Japan is the most lopsided of the G5 economies - US, UK, Japan, France and Germany - with the lowest consumption and highest investment ratios; the largest current account surplus and budget deficit; the worst demographics and the lowest interest rates. "These oddities are almost invariably ignored," he says. "They illustrate how far the economy is from any likely equilibrium and this conflicts with the conventional wisdom which holds that Japan has corrected the past distortions of its economy and is now set on a path of balanced growth." Mr Smithers argues that the household savings rate, down from nearly 12 per cent in 1997 to just over 2 per cent last year, is unlikely to fall further. Thus, an improvement in consumption will require workers to take a greater share of earnings, damaging future corporate profitability...more...

[Captain Japan]

Thus, an improvement in consumption will require workers to take a greater share of earnings, damaging future corporate profitability.

I don't see that happening soon. I think most of this supposed turnaround has been at the expense of the employee. New-hire salaries are a joke. And more and more, large companies don't hire OLs direct like they used to. They go through agencies and rotate new ones in every 6 months, which is much cheaper in that benefits are zero.

I think a lot of salarymen are increasingly relying on their expense accounts as some kind of solace. I was talking to the guy across from my desk last Friday. We were talking about beer (nice topic). I said I knew a place in Hachobori that serves Ebisu for 380 yen - very reasonable, I thought. He said, ah, that is too expensive. The guy next to me concurred, saying that he knew a place in Roppongi that had decent beers for 100 yen. Meanwhile, either of these guys could be found at a Kabukicho hostess club blowing 50k on any given Friday night, which of course is on the company.

[Mulboyne]

I don't see that happening soon.

I don't think Smithers expects that either. He does highlight one of the dilemmas for the economy. As you say, labour hasn't seen much benefit from the pick up in profits to date. Meanwhile, shareholders are looking for better returns in the form of dividends or higher share prices so companies are having to allocate more of the kitty to them. At the same time, capital spending has to rise and probably R&D spending too.

Labour might see increased returns from higher profits but their share of the cake is declining overall and that poses a problem for consumption further out. The current option seems to have been to squeeze unskilled workers and reward skilled workers (sometimes simply by reinstating or expanding the company entertainment account) which has been a factor behind all these inequality stories.

It seems unlikely that capital markets will go into reverse and shareholder interests take a back seat once again but it isn't out of the question.

[Captain Japan]

Labour might see increased returns from higher profits but their share of the cake is declining overall and that poses a problem for consumption further out. The current option seems to have been to squeeze unskilled workers and reward skilled workers (sometimes simply by reinstating or expanding the company entertainment account) which has been a factor behind all these inequality stories.

A few years ago a salaryman told me that his wife allocated him 30k a month for everything he needed to live on. I think that excluded train fare, which comes from the company. I could quickly see why 300 yen gyudon shops are full of nothing but salarymen at lunch. He told me he waited until he went on overseas business trips to buy underwear, socks, etc. from the 5,000 yen daily stipend money he was given. But the one thing he kept emphasizing was this: this is not just me, it is true of every salaryman in Tokyo. Just the other day a friend told me that likely it is between 30 and 40k. But still, that is ridiculous.

So basically you've shrunk your average purchases into 300 yen gyudon and 100 yen beers. Either that, or its the 50k on a Friday night at the hostess club. I'm not surprised consumption hasn't turned around - half the population is being held hostage.

[cstaylor]

3man per month? Is the wife packing a daily bento?

[Captain Japan]

This is what I was talking about...
EDITORIAL: Temp workers
Asahi

While the economic recovery has made it much easier to find a job, the number of permanent workers has decreased significantly. That's because companies have been keen to replace regular employees with non-permanent workers such as temporary and part-time staff. Now, according to this year's white paper on labor economics, one in every three Japanese workers is not on a regular payroll.

With the rise of the flexible workforce, however, a troubling trend has emerged in the manufacturing sector. A growing number of manufacturers are using temporary workers who are hired through staffing contractors.

Typically, a staffing contractor recruits workers through job magazines and other channels, for factory work outsourced by a manufacturing company. The workers are then dispatched to the company. Once workers are placed in the factory jobs, the staffing contractor walks away, leaving its staff in the hands of the manufacturer. At the plant, the manufacturer's employees treat the temporary staff as if they were subordinates and order them around. When a company uses temporary workers that are employed directly by the company it is obliged by the worker dispatch law to assume responsbility for their safety. The company is also required to offer full time employment to temporary workers who have done the same job for a certain period of time....more...

[Big Booger]

3man per month? Is the wife packing a daily bento?

That or he's dumpster diving behind 7/11 at night time for his next day's bento!

[Captain Japan]

I don't think Smithers expects that either. He does highlight one of the dilemmas for the economy. As you say, labour hasn't seen much benefit from the pick up in profits to date. Meanwhile, shareholders are looking for better returns in the form of dividends or higher share prices so companies are having to allocate more of the kitty to them. At the same time, capital spending has to rise and probably R&D spending too.

The Asahi is trying to come up with something to call this...I'm putting the whole article because these Vox Populi bits disappear after a while...
Latest 'boom' would be good ... if we could see it
Asahi
11/25/2006

According to the government, the current period of uninterrupted economic expansion that started in February 2002 has lasted longer than the Izanagi boom of 1965-1970.

What this latest "boom" will come to be labeled should be interesting, considering that many people say they have yet to experience any real benefit from the growth.

Some postwar booms were given Shinto-related names.

The period of economic expansion that came 10 years after the end of World War II was called the Jinmu boom, meaning "the greatest boom ever since the first emperor Jinmu."

Then came the Iwato boom in 1958 to 1961, which was longer than the previous growth period, so the name went further back into antiquity, and referred to the Japanese myth of Ama no Iwato (cave of the sun god).

The Izanagi boom which came next was even longer than the previous two, so went back further still, taking its name from the mythological god, Izanagi-no Mikoto, who is said to have been the creator of the Japanese islands.

The period of growth that started in the late 1980s was called the "asset price bubble." In the midst of it, the editorial staff of The Asahi Shimbun's weekend economy section asked readers what it should be called.

Unsurprisingly, the most favored name was "bubble boom."

Many said that the economic upswing brought rewards to only a handful of already rich people, but for the rest of the country it brought nothing but a "handful of dust." Other readers suggested names like "illusion boom," "paper boom" and "gimmick boom."

The editorial staff, meanwhile, proposed calling it the "bubble dance boom."

In the days of the Iwato and Izanagi booms, the annual growth rate exceeded 10 percent.

The country had risen from the scorched ruins of the war, returned to the community of nations and was hurtling toward becoming a mass-consumption society.

I feel the enthusiasm of those energetic days in the naming of economic booms after mythical legends.

The current growth rate of the latest boom is 2.4 percent.

I think there is nothing gimmicky or fixed about this figure. But somehow, the phrase "sakura boom" comes to mind, perhaps because of the recent news of government-fixed town meetings (sakura in this sense meaning not so much the flower but "a plant" in Japanese).

Perhaps this economic boom is nothing but numbers, a "facade boom." Or maybe it is a murky, "opaque boom," so hazy that we cannot clearly see it.

[Captain Japan]

EDITORIAL/ Record expansion period
Asahi

Japan is now going through its longest postwar economic expansion period. The nation's economy has grown for four years and 10 months in a row, eclipsing the previous postwar record of uninterrupted growth set by the so-called Izanagi boom four decades ago, according to the government's monthly economic report for November.

This sustained recovery began after a long period of banking weakness in the economic downturn triggered by the burst of the bubble economy in the early 1990s. The stage for growth regeneration was set by structural reforms led by former Prime Minister Junichiro Koizumi, which set the economy's financial wheels moving smoothly again. As the structural burdens were removed one by one, the economy gradually regained its health.

But most people would say they are not feeling the benefits of the recovery. The economy has been growing only at a modest average annual rate of slightly over 2 percent, compared with a torrid growth rate of over 10 percent during the Izanagi boom. Such a breakneck pace of expansion cannot be expected for a matured economy like Japan's. Still, the lackluster performance of consumer spending has been a big disappointment.

Japan's growth in the past several years has been fueled by strong exports and corporate capital investment. But robust revitalization in household outlays is essential for a powerful economic expansion. Initially, consumer spending was expected to pick up steam later in the expansion, but consumption growth is now in danger of stalling before really taking off.

There seem to be more than one reason for sluggish growth in consumer spending. Some economists blame consumers' cautious attitude toward spending on their shrinking confidence in the long-term sustainability of such key social security programs as pension and health-care programs. The biggest factor behind weak consumer spending, however, is anemic wage growth. In the past, economic expansion led to fatter paychecks, bringing more buying power to households and thereby stoking consumption. This traditional pattern of growth is not holding up this time, with wages showing no signs of rising....more...

The end of this article calls for companies to raise salaries to give the economy a nudge. But I don't see it happening. What would be the motivation? Until employees are willing to dump their current job in favor a higher-paying one why would salaries increase? The employers have a good thing and know it.

[Mulboyne]

Mainichi: Half of households in Tokyo earn less than 5 million yen in annual income

Households with less than 5 million yen in annual income surpassed 50 percent in 2006 -- for the first time since 1981, a survey conducted by the Tokyo Metropolitan Government has suggested. The metropolitan government surveyed 6,000 households randomly selected from various parts of Tokyo in November and December last year. Of them, 3,775, or 63 percent, responded. Over half, or 51 percent, of the households responded that their annual income is less than 5 million yen, up 13 points from the previous survey in 2001. Those that earn less than 3 million yen a year accounted for 27 percent, an increase of 9.3 percentage points from the previous poll.

The results also show that the number of families with high incomes has been decreasing. Those with an annual income of 20 million yen or over accounted for 1.6 percent, a decline of 1.7 percentage points from five years earlier. The ratio of households with income between 10 million yen and less than 20 million yen came to 11.5 percent, down 3.2 points. Furthermore, 28 percent of households surveyed responded that their main sources of income are pension or welfare benefits. A record high of 22 percent said nobody is their households is employed. The metropolitan government has conducted such a survey every five years since 1981.

[Mulboyne]

[Mulboyne]

Bloomberg: More Than 80% of Japanese Complain of Wealth Gap, Yomiuri Says

Eighty-three percent of the Japanese people responding to a Yomiuri newspaper survey said they are dissatisfied with economic disparity, with 33 percent saying that wealth distribution is totally unfair. Yomiuri conducted the survey as a local research partner of a wider study commissioned by the British Broadcasting Corp., in which 34,582 people in 34 countries were interviewed between Oct. 31 and Jan. 25. The newspaper didn't say how many people were contacted in Japan, nor did it provide a margin or error. Among the 34 countries, Japan ranked fourth in terms of the percentage of people who were dissatisfied over economic disparity between the haves and have-nots. South Korea tops the list with 86 percent dissatisfied, Yomiuri reported. Italy and Portugal shared the number two position, with 84 percent of the people complaining about economic inequality. The figure is 78 percent in France, 77 percent in Russia, 71 percent in Germany, 56 percent in the U.K., 52 percent in the U.S., and 39 percent in Canada, according to Yomiuri. Results of the complete survey are to be released by the end of March, the newspaper said.

[kurohinge1]

[SIZE="4"]One in six Japanese living in poverty: survey[/SIZE]

Nearly one in every six Japanese lives in poverty, one of the highest rates among developed countries, according to the latest survey by Japan's welfare ministry.

In Japan's first official calculation of its relative poverty rate, the ministry said 15.7 percent of Japanese people lived on less than half the median disposable income in 2006.

The figure, based on national statistics of income in 2006, was up from a figure of 14.6 percent for 1997 according to the newly released ministry data.

Japan is confirmed to be "among the worst" of the Organisation for Economic Cooperation and Development's (OECD) member countries, Health, Labour and Welfare Minister Akira Nagatsuma said Tuesday.

. . . An OECD report showed that Japan had the fourth-highest relative poverty rate among 30 member countries in the mid-2000s.

Japan's rate came to 14.9 percent in 2004, behind worst-ranked Mexico with 18.4 percent, Turkey with 17.5 percent and the United States with 17.1 percent.

The OECD report also showed the poverty rate for working single-parent households was very high in Japan, reaching 58 percent, far above second-worst Luxembourg with 38 percent. . . more

[Screwed-down Hairdo]

[SIZE="4"]One in six Japanese living in poverty: survey[/SIZE]

Don't I know it....

[Samurai_Jerk]

If Japan has one of the worst poverty rates and is also one of the most egalitarian, pay for upper management here must suck balls. Actually, I already knew that it did.

[IkemenTommy]

AKA the working poor

[maraboutslim]

I wonder how they do this research. For example, does it count young-ish people who are still living with their parents? If your room and board and pocket money is covered, though your income may fall in the poverty zone, you're not really living in "poverty".

[Ketou]

I wonder how they do this research. For example, does it count young-ish people who are still living with their parents? If your room and board and pocket money is covered, though your income may fall in the poverty zone, you're not really living in "poverty".

Yea then you also have to count the homeless who never get added to any statistics as they don't exist.

[Coligny]

I wonder how they do this research. For example, does it count young-ish people who are still living with their parents? If your room and board and pocket money is covered, though your income may fall in the poverty zone, you're not really living in "poverty".

Yup, also i'm ready to bet that remote countryside people without indoor plumbing living happily and eating from their garden get included. There are values that just don't compare down here.
Poverty in city sucks. In the deep countryside usually everybody find a place somewhere.

[Level3]

I think the value of just about any study in social sciences can be summed up by our most wise philosopher.

"Facts are meaningless. You could use facts to prove anything that's even remotely true! "
-Homer Simpson