Japan's poverty gap has politicians calling for rise in minimum wage

It is only over the past decade that poverty has come to be recognized in Japan. Prior to that, the government didn't even compile statistics on income inequality.

Having failed to graduate from high school in a country that places significant emphasis on education and where 92 percent of the population graduates, Hiro knew his prospects of a steady job in a Japanese company were slim.

But, he says, “I never thought it would be this bad. I didn’t ever expect to be rich, but I never thought it would be this tough,” says the 27-year-old, who asked to be identified only by his first name out of respect to his family.

Still, regarding himself as a hard worker, he estimated he could earn a decent wage with his hands. Following four years of regular employment in an automotive parts company when he left school, Hiro has spent seven years working where and when he can. Unable to find regular, full-time employment, he works at factories, construction sites, and anywhere else he is sent by a temporary agency, earning 160,000–180,000 yen ($1,580–1,980) a month, when there is work.

Hiro represents a growing number of Japanese living below the poverty line.

Famously, a majority of Japan’s population once considered themselves middle class. While this was always something of an illusion, income inequality was lower than in other industrialized nations and there was almost full employment. Now, the ranks of those being left at the bottom of the world’s third-largest economy are swelling, and they are falling further behind the rest of society. The Health, Labor and Welfare Ministry announced last month that a record 2.1 million people are now receiving benefits and other financial assistance.  

As Japan’s corporations struggle to compete with lower-cost Asian rivals, along with the yen at a record high, they are increasingly moving factories abroad and acquiring foreign companies. The biggest losers in this economy, however, are the workers in Japan who used to be steadily employed in those factories on decent wages, with pensions and other benefits. The once reliable public construction projects, and the jobs that went with them, are also drying up as Japan’s government attempts to rein in its huge national debt.

Affected by increasing poverty

Hiro lives in the working-class district of Sanya on the east side of Tokyo, an area that has long been associated with day laborers, the homeless, and others that enjoyed little of the benefit of Japan’s “economic miracle,” when the country rose from the ashes of postwar devastation to become one of the most affluent nations.

“Sometimes it’s good and there’s steady work for months, even a year. Then other times there’s very little for months,” he says. “It’s hard to live in Tokyo like this, even around here. It’s not a cheap city.”

He owes “a few hundred thousand yen [a few thousand dollars]” to a couple of private loan companies, but says he can’t see “how or when” he can repay it. When work dries up, Hiro is forced to apply for welfare assistance, something he says he and his family finds “shameful.”

However, not only those at the bottom are being affected by increasing poverty and pessimism about the country’s future.

“The postwar baby boomers believed that their children would have better lives than them. But these days, many people no longer think that,” says Masami Iwata, a professor of social welfare at Japan Women’s University.

“At this university, the academic level is dropping: Perhaps it’s because students feel they don’t have a goal to aim at anymore,” says Professor Iwata.
 
The results of a Gallup survey, released July 25, on optimism in 150 countries, found Japan the fifth most negative nation, with 30 percent of the population expecting their lives to get worse in the future. Countries that were more negative about the future include strife-torn Syria and austerity-hit Portugal and Greece. 
 
“Crime is still low, though we have more than 30,000 suicides a year and an increase in depression. However, the social order, which has been a feature of Japanese culture, could be under threat as poverty grows and the gap in society continues to widen,” says Iwata, who adds she fears the rise of “intolerance and aggression.”

New phenomenon? 

It is only over the past decade that poverty has come to be recognized in Japan. Prior to that the government didn’t even compile statistics on income inequality. Sixteen percent of Japanese now live on less than half the average national income, making it the sixth most unequal country in the world, according to the OECD.
 
“The biggest change is in the situation of the working poor, mostly temporary employees who can be hired and fired easily. They have no job security and their wages are being forced down,” says Toshio Ueki, a spokesperson for the Japanese Communist Party (JCP), which has had parliamentary representation for more than six decades.
 
The JCP campaigns for a minimum wage of 1,000 yen ($12.80) an hour, which Mr. Ueki suggests, “would get the economy moving,” paid for by tax increases for high earners and big business.
 
A rise in the minimum wage level, which ranges from 625 yen to 850 yen according to area and industry, would boost the income of temporary workers like Hiro.

“I want to start a family and have children,” says Hiro. “But I can’t even think about getting married when I have no steady income.”