Japan is known as the country that has one of the highest poverty rate in advanced countries. Why does poverty spread around in Japan so much?
There are two types of poverty in Japan. The first one is defined as “absolute poverty” which makes people suffer from even clothing, housing and food. The other one is defined as “relative poverty” which people look relatively poor compared to the domestic average social wealth.
A type of poverty that majority of people falls into in Japan from the above two types is “relative poverty” and Japanese society doesn’t take poverty with serious sense of crisis that much.
In fact, a word of “income gap” sounds best to explain the poverty in Japan rather than a word of “poverty rate”.
According to Comprehensive Survey of Living Conditions researched by the Ministry of Health, Labour and Welfare, one person in seven suffers from poverty and half or more one parent(mother) families are really in hard situation although Japan is the third economic giant in the world.
Why does poverty problems come to the surface in Japan?
Contents
Japan’s poverty rate
Poverty rate of Japan is reported as Comprehensive Survey of Living Conditions by the Ministry of Health, Labour and Welfare. The latest data of Japan’s poverty rate is 15.6% which indicates relative poverty rate researched in 2015
The research of the survey in 2012 has a result of 16.1 %. Compared to the last survey, poverty rate has improved slightly.
On the other hand, “Child Poverty” targeting to children younger than 17 years old was 14% in 2015. Compared to the last survey in 2012 that indicated 16.3%, it has largely improved. Even with these better improvement, one child of seven still falls into poverty. The poverty rate of one parent family has also good improvement that its rate went down from 54.6% in 2012 to 50.8% in 2015 but more than half of entire one parent families are in a situation recognized as a poverty.
Poverty rate is the rate of people who have only less than median of equivalent disposable income ( which is income squared by the number of a family members) that deducts social security costs and taxes and etc, from total income.
Median of equivalent disposable income is 2,450,000 a year (21,716 dollars a year). In short, relative poverty class is defined as households having only less than 1,220,000 yen annually and its rate is called poverty rate.
Thinking that annual income is 122,0000 (10824 US dollars), its monthly one comes to be 100,000 (887 US dollars). Since Abenomics started, even while the Japanese Economy hasn’t yet recover from the deflation, food prices are more expensive than before in supermarkets. You’re sure you understand how hard to survive one month with only 887 dollars.
By the way, median of disposable income that defines poverty rate goes up and down around 2,450,000 yen but it was 2,970,000 yen 20 years ago. In the mean time, median of disposable income has reduced to 520,000 yen for 20 years. Speaking of 520,000, its monthly value comes to be 43,000 yen. You probably can understand this number told us there was a big economic slump in Japan called “Lost Twenty Years”
Actually, according to the survey about “savings”, Households that have few savings is 14,9% of entire households. When we observe only single-mother-household, its rate goes up to 37.6%. People who said having a difficult time were 56.5% of entire households and 82.7% of single-mother-household answered having a difficult time.
Program for International Student Assessment (PISA) in 2015 summarized by OECD has reported the data of international comparison of prevalence of 13 school things.
This assessment defines a student who has less that only 5 school things of total 13 school things is regarded as living in poverty.
By the way, Japan’s poverty student rate is 5.2%. Sure enough, Japan is still the highest level of poverty among G7 countries.
One parent family poverty rate
There are two things that you have to pay attention to about poverty in Japan. The first thing is height of poverty of one parent family, whose income level is as small as it doesn’t reach the public assistance standard.
The second thing is poverty of old people. If poverty of mother child family is urgent mission to be tackled with, old people’s poverty is also future mission to be solved.
There is high possibility that health insurance association and the Japan Pension Service cannot maintain the current benefit standard by declining population and aging society.
By collapse of pension scheme, it is said that half the number of old people who occupy one third of entire Japanese population will fall into poverty in the future.
Appropriate countermeasure need to be taken against these problems as soon as possible.
At any rate, child’s poverty problem will have an great impact on Japanese economy in negative way. Japanese child’s poverty problems that one of seven children is said to suffer from poverty bring another problem of losses of educational opportunities. I will introduce 4 backgrounds that such poverty spread around.
Distortion of progressive taxation system
Japanese income tax rate adopts progressive taxation system that the more income people have, the more tax will be imposed. The current maximum income tax rate is 45%.
Japanese progressive taxation system is fair enough for everyone at a first sight but currently, “tax burden rate” is the same level between working family having the highest income and old retired family relying on pension service.
Even if the tax burden rate is the same, the more income you have, the smaller the ratio affected to family budget becomes. And if also the tax burden rate for old retired people who have small income is the same level with rich working families, it is really hard for old people to pay tax on regular basis so this progressiveness of taxation is nothing less than fraud.
From now on, consumption tax should go up and this is going to be merciless tax policy for mother child families who suffer from poverty to only pay increased consumption tax.This is going to be probably high burden for them.
So the Japanese government is required to fix this contradiction and function this progressive tax system properly right away to impose appropriate amount of tax in proportion to every people’s income level.
Improvement in labour productivity that Abe administration has been promoting enables us to realize equal pay for equal work but there is questions that this will function properly. Outline of work and raising children balance measures can’t even step forward if the government is bound by the past sense of value and its rules.
Chain of poverty
Seriousness of poverty problems tend to spark a chain reaction beyond generation. Poverty of parent generation takes over to their children’s generation and poverty of children generation takes over to their grand children’s generation. This is called “chain of poverty”. Parents’ financial poverty have a great affection on their children’s educational environment and school attendance.
Currently the ratio of university or college graduates is more than 50 % and those university and college graduates are standardized by the Japanese society. There is an opinion that generation that can’t go on to higher educational institutions falls far behind in life-time earnings and this connects to chain of poverty after all.
Of course, wage differential is still big in accordance with the size of the company and the industry. Moreover, Japan attaches too much emphasis to educational background.
The government need to grab these circumstances accurately and take measures. Scholarship system that students end up incurring a lot of debts to go on to university or college will not be fundamental solution. Instead, it narrows down the possibility of career building after graduation
Laziness of public support
According to OECD, the ratio of public support to educational institutions occupied in GDP, Japan is the second worst in 33 members of OECD. This rank indicates public support to children who suffer from poverty by the Japanese government is insufficient.
Public assistance system is regarded as the last stronghold.
But its financial sources are pressed by extreme financial deficit. The government raised up its standard of people who can apply for this social welfare.
Livelihood assistance costs for mother child family is around 130,000 yen to 140,000 yen (1155 US dollars to 1255 Us dollars) which is of course difference depending on family structure and living region.
Annual income of one parent family in poverty class is averagely about 1220,000 yen (10,843 dollars), which comes to be 100,000 yen monthly.
When you think about livelihood assistance costs which is monthly 130,000 yen to 140,000 yen, the amount of income 100,000 yen is unfairly low level.
If it’s the case, you think that entire one parent families that belong to poverty class had better receive livelihood assistance but it is not very easy to have that benefit.
There is Children’s cafeteria that provides foods to poverty children for free which is makeshift for underdeveloped public assistance system managed by the Japanese government. But it’s not fundamental solution. It is not exaggeration to support one parent family suffering from hard poverty as soon as possible.
There are 1,238,000 mother child families in Japan. When we think about half the number of mother child families belongs to poverty class, its number comes to be 620,000 households. At least 1,200,000 people are suffering from poverty when we think that one family has at least mother and her child.
Unimproved working environment
Needless to say, the reason that children suffer from poverty is parent’s low income. This is evident to think about poverty rate of one parent family is over 50%.
All the causes are led by a background of “Working poor” that generates very bad working environment. In Japan, if mother keep working while raising her child, almost few company will hire her as full-time worker. It is standard in Japan for a mother to make a living by part time job if she needs to take care of her child at the same time and this kind of manual labor salary is insufficient to make cultured standard living.
There are a lot of companies unmerciful to single mother and the ratio of single mothers who is hired in full-time position is over 40% but 57 % of single mothers is still hired in temporary position.
Japanese companies think that it is pretty difficult for a single mother to make enough time to work in full-time position while being pressed with domestic affairs which is mostly child’ s care like school and kindergarten. After all, the gap between salary of temporary position and that of full-time position comes to the surface as poverty.
No matter how excellent ability a mother have, working opportunity is not given equally due to the reason single mother can’t make enough time to commit a work. This is the present Japan’s working environment problem.