Class 4 PowerPoint

Japan in the 21st Century

Robert CrokerJapanese Society II: Contemporary Japan

Center for Japanese StudiesNanzan University

Contents1. demographic change:

demography is destiny

2. economic change: macroeconomic blues

3. socioeconomic change: (not) sharing the pie

1. Demographic Change: demography is destiny

birth and death rates

Japan’s population

birth rates

death rates

life expectancy at birthGINI Country Report Japan

Page 59

Figure 3.15: Life expectancy at birth by gender

Sources: Complete Life Table and Abridged Life Table (Statistics and Information Department, Minister’s

Secretariat, MHLW).

Note: People born in Okinawa prefecture are excluded from calculations before 1970.

Health is not only measured by life expectancy. Living actively is another important measure of health.

Comprehensive Survey on Living Conditions (MHLW) enquires about “self-reported state of health”

and “frequency of visits to a doctor.” The report states that about 8% of respondents had some health

problems and went to clinics or hospitals in 2010. The report also shows that the number of

unhealthy people increased between 1998 and 2007, and subsequently decreased. Considered that

Japan’s economy was in a fairly severe state between 1998 and 2001, relatively good state between

2001 and 2007, and subsequently in a little worse state, the state of health of people seems not to

move simply in accordance with economic conditions, although the increase in the number of

unhealthy people may be partly due to population aging.

Comprehensive Survey on Living Conditions also asks respondents about their health consciousness

and subjective health conditions. Figure 3.16 shows differences in subjective health between those

with different educational attainments. People with low educational levels report an unhealthy state,

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Life expectancy at birth, female (years) Life expectancy at birth, total (years)Life expectancy at birth, male (years)

Ohtake, F., Kohara, M., Okuyama, N, Yamada K. (2013). Growing inequalities and their impacts on Japan.

ageing Japan

population pyramid

aged dependency ratio

population density map

2. Economic Change: macroeconomic blues


nominal GDP: North America, China, 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

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real GDP per capita

GDP per capita (PPP)


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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3. Socio-economic Change: (not) sharing the pie


unemployment rate: males


Page 23

Figure 2.12: Unemployment rate

Source: Labor Force Survey (Ministry of Internal Affairs and Communications (2010)).

Figure 2.13: Unemployment rate by age group and gender

Panel A. Male

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(%)

Age 15-24 Age 25-34 Age 35-44 Age 45-54 Age 55-64


unemployment rate: females GINI Country Report Japan

Page 24

Panel B. Female

Source: Labor Force Survey (Ministry of Internal Affairs and Communications)

Note: The listed unemployment rates are based on official data for every February from 1989 to 2009.

Table 2.2 summarizes the trend of the employment rate. The total employment rate decreased by

about 1% between 1983 and 1988, and increased by about 2.5% between 1989 and 1992. It then

started decreasing steadily after the economic bubble burst: decreased by about 5% between 1993

and 2004. It has remained at around 58% since 2007.

Figure 2.14 shows the trend of the employment rate for males (Panel A) and females (Panel B)

separately by age group. The male employment rate in the working-age population decreased in the

late 1990s. Especially for those aged 25-34, it was about 95% in the early 1990s, but declined to less

than 90% in the 2000s. For females, the employment rate increased for all age groups, but it is not at

a high level yet: Japan’s employment rate for those aged 15-64 was 60.1% in 2010 (Labour market

statistics, OECD Employment and Labour Market Statistics), which is lower than in North European

countries (70-80%), the United States (62.4%), the United Kingdom (65.3%), and Germany (66.1%),

but is at the same level as France (59.7%).

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(%)

Age 15-24 Age 25-34 Age 35-44 Age 45-54 Age 55-64

percent of workforce unionized



Page 72

4.3. Unionized Workforce

The labor unionization rate has declined significantly, especially since the late 1970s (Figure 4.4).

Behind this downward trend is a change in Japan’s employment conditions. As seen in Chapter 2,

regular full-time workers have decreased and non-standard part-time workers have increased since

the late 1990s.

Figure 4.3: Percentage of workforce unionized

Source: The number of union employees is from Basic Survey on Labour Unions (MHLW), and the number of

employees is from Labour Force Survey (Statistic Bureau).

Note: The figure shows the ratio of the number of employees in labor unions relative to the total number of

employees in Japan.

A decline in the rate of union participation is also observed in the following figure. Figure 4.4 shows

the kinds of voluntary organizations and activities in which Japanese people participate, and changes

in the 1990s. The big changes between 1990 and 2000 are a decrease in labor unions and an increase

in religious groups. An increase in religious groups may reflect an increase in social and economic

instability or uncertainty, which might be related to an increase in Inequality.

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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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1984 1994 2004

overall: highest incomes – from Tokyo to Osaka

lowest incomes – in the outer regions e.g. Tohoku, Shikoku, Kyushu

per capita income: by prefecture

overall: lowest poverty – central Japan (Aichi, Gifu, Nagano, Toyama, Shizuoka)

highest poverty – urban areas (particularly Osaka, Tokyo) and outer regions (e.g. Hokkaido, northern Tohoku, Shikoku, Kyushu)

poverty rates: by prefecture

growing perceptions of poverty



Page 65

Figure 3.20: Living conditions

Source: Comprehensive Survey on Living Conditions (MHLW (2010)).

Figure 3.21: Living conditions by income quintiles

Source: Comprehensive Survey on Living Conditions (MHLW (2010)).

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1992

1998

2004

Very hard Hard Not hard but not easy Easy Very easy

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

199219982004199219982004199219982004199219982004

III

IIIIV

Very hard Hard Not hard but not easy Easy Very easy

growing perceptions of inequality



Page 79

redistribution policies.

Figure 4.10: Percentage of people who agree that “inequalities are too large in the country”

Source: International Social Survey Programme (1999, 2009)

http://zacat.gesis.org/webview/index.jsp?object=http://zacat.gesis.org/obj/fStudy/ZA3430

http://zacat.gesis.org/webview/index.jsp?object=http://zacat.gesis.org/obj/fStudy/ZA5400

Note: The figure summarizes answers to the question “How much do you agree or disagree ‘Differences in

income in Japan are too large’?”

Figure 4.11: Percentage of people who agree that the “poor are lazy”

Source: World Values Survey (2000, 2005) Note. The figure summarizes answers to the question “Do you agree

or disagree with the following statements?: People who don’t work become lazy.”

Figure 4.12: Percentage of people who agree that the “government should redistribute

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1999

2009

Strongly agree Agree Neither agree nor disagree

Disagree Strongly disagree Cant choose

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2005

Strongly agree Agree Neither agree Disagree Strongly disagree

“the government should redistribute income”



Page 80

wealth/income”

Source: JGSS (2000, 2001, 2002, 2003, 2005, 2006, 2008, 2010)

Note: The figure summarizes answers to the question: “It is the responsibility of the government to reduce

differences in income between families with high incomes and those with low incomes.”

4.7. Chapter Conclusion: Appraisal of the Interdependence and the National Story

of Inequality Drivers and their Cultural and Political Impacts

In this chapter, we showed how individuals connect to society in Japan. First, we looked at voting

behavior. The voting rate is about 67% in Japan (this is also about the average among OECD countries)

and has gradually decreased over three decades. There is no difference in voting rate by educational

level, while the voting rate is significantly higher among older people than among younger people.

Second, we found that the labor unionization rate has steadily decreased over time. This reflects a

weakening of the traditional seniority system and increase in non-standard employees in Japanese

companies. Third, we found that the level of trust in others is about average in OECD countries and

increased between 1998 and 2007. Fourth, regarding political positions, about 30% of Japanese

position themselves as conservative and about 20% as progressive. The share of people with

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2001

2002

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2010

Agree Somewhat agree Neither agree nor disagree Somewhat disagree Disagree

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

number of households on welfare



Page 17

Figure 2.6: Changes in the number of households living on welfare

Source: Care Reports of Welfare Administration (Ministry of Health, Labour and Welfare (2010)).

Note: The bars show the number of people living on welfare support, which is measured on the right axis. The

line shows their percentage (number relative to 1,000 persons), which is measured on the left axis.

2.1.5. Educational Inequality

Table 2.1 shows the average years of education for various countries. Japan is ranked in the higher

group. Figure 2.7 shows that the Gini coefficient for years of education becomes smaller as age

decreases for groups aged between 60 and 85. The Gini coefficient becomes gradually higher as age

decreases for groups aged between 35 and 39, and it becomes clearly higher as age decreases for

groups aged between 20 and 34. Because Japanese people rarely go back to school once they started

working, this trend means that the inequality in years of education fell in the 1960s, started

increasing in the early 1970s, and increased gradually for three decades, expanding further from the

early 2000s.

Table 1.1: Mean years of education

Country Mean Education Years

500 000

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(people) (% )

types of families on welfare



Page 39

Figure 2.26: Welfare recipients by family type (monthly average)

Source: Care Reports of Welfare Administration (MHLW (2010)).

Note: The number of individuals is measured on the vertical axis.

Figure 2.27: Welfare recipients by age group

Source: National Survey of Public Assistance Recipients (MHLW (2010)).

Note: The number of individuals is measured on the vertical axis.

0 200 000 400 000 600 000 800 000

1 000 0001 200 0001 400 0001 600 000

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definition: overview of reading, mathematical and scientific literacy

Japan: very low – 0.4%#1 lowest in the OECD

United States: low – 2.2%#5 lowest in the OECD

Dimension 1 Mater ia l wel l -being

more than a certain degree, from the average standard of living of the society in which one lives.

The European Union offered its definition of poverty in 1984: “the poor are those whose resources (material, cultural, and social) are so limited as to exclude them from the minimum acceptable way of life in the Member States in which they live”. For practical and statistical purposes, this has usually meant drawing national poverty lines at a certain percentage of national median income.

Figure 1.1 shows the percentage of children growing up in relative poverty – defined as living in a household where the equivalent income is less than 50% of the national median – for 24 OECD countries.3

Critics have argued that relative poverty is not ‘real’ poverty, pointing out that many of those who fall below relative poverty lines enjoy a standard of living higher than at any time in the past or than most of the world’s children in the present. But this fails to acknowledge that in today’s OECD nations the cutting edge of poverty is the contrast, daily perceived, between the lives of the poor and the lives of those around them.

Nonetheless an international comparison based on a poverty line drawn at 50% of the median national income presents only a partial picture in that it makes no allowance for differences in national wealth. It shows, for example, that the child poverty rate in the United States is higher than in Hungary, but fails to show that 50% of median income (for a couple with two children) is approximately $7,000 in Hungary and $24,000 in the United States. The fact that a smaller percentage of children are growing up poor in the Czech

Figure 1.1 Relative income poverty: Percentage of children (0-17 years) in households with equivalent income less than 50% of the median.

0 5 10 15 20 25

Date: 2000,1999 (Australia, Austria and Greece), 2001 (Germany, New Zealand and Switzerland).

United States

New Zealand

United Kingdom

Italy

Ireland

Spain

Portugal

Poland

Japan

Canada

Austria

Hungary

Greece

Australia

Germany

Netherlands

France

Czech Republic

Switzerland

Belgium

Sweden

Norway

Finland

Denmark

OECD Nations

Figure 1.2 Percentage of working-age households with children without an employed parent

Date: 2000, 1999 (Japan and Canada), 1998 (Switzerland), 2001 (Spain, the Netherlands, and Germany), 2002 (Austria, Norway and Poland). Non-OECD, 2004 (Israel).

0 2 4 6 8 10 12

Israel

Hungary

Australia

Poland

Germany

United Kingdom

Czech Republic

New Zealand

Ireland

France

Netherlands

Norway

Spain

Denmark

Belgium

Italy

Finland

Canada

Sweden

Greece

United States

Austria

Switzerland

Portugal

Japan

OECD Nations

Non-OECD Nations

6 I N N O C E N T I R E P O R T C A R D 7

children without employed parent

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

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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 - children

definition: 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


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


0 10 20 30 40 50








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).

Crime

Number of crimes in Japan falls to postwar low in 2015. The Japan Times (January 14, 2016).

Which are more dangerous?

14-19 year olds over 65 year olds

Which are more dangerous?

39, 501 crimes (2015) 47, 643 crimes (2015)Hoffman, M. Adding looming poverty to list of seniors’ woes. The Japan Times (August 15, 2015).

Review1. demographic change:


2. economic change: macroeconomic blues

3. socioeconomic change: (not) sharing the pie

Review1. demographic change:


population is fallingvery low birth rateageing populationinverted population pyramid

Review2. economic change:

macroeconomic blues

little real growth in the economylong-term deflationlittle growth in real wagesgrowing government debt – but not effectively

used to ameliorate poverty

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

The Face of Poverty


growing perceptions of poverty

Editorial: Poverty and the right to live. Mainichi Japan (May 5, 2015).

Education

Hagiwara, Y., & Reynolds, S. One in six Japanese children live in poverty, threatening their education, Future. The Japan Times (September 10, 2015).

Education

Hagiwara, Y., & Reynolds, S. One in six Japanese children live in poverty, threatening their education, Future. The Japan Times (September 10, 2015).

Education
