Growing poverty in Japan and social divisions: Covid convulsions

Growing poverty in Japan and social divisions: Covid convulsions

Kanako Mita, Sawako Utsumi, and Lee Jay Walker

Modern Tokyo Times

The coronavirus (Covid-19) crisis internationally is unleashing increased poverty. Hence, while government intervention in countless nations has boosted the financial markets – thus increasing rich pickings for millionaires and billionaires alike – the poorest in society have become further marginalized.

Japan is no different. This is cause for further concern in a nation that already fails the working poor, single parents, temporary workers, and an inadequate welfare system for people who fall through the net concerning regulations when sick and so forth. Indeed, even when people claim benefits, they are still blighted by paying taxes from previous earnings because of the system implemented in Japan. Therefore, individuals who are struggling are pressured to find work quickly.

The Mizuho Research & Technologies report – and others – highlights further economic and social inequality since the coronavirus crisis began. Prime Minister Fumio Kishida uttered the need for a “new Japanese capitalism.” This concerns the need to address the desire for a fairer society. However, the actions of the Kishida administration remain rather vague when it comes to reconciling the increasing social divisions that began under the leader Junichiro Koizumi (2001-2006).

Reuters, reporting in 2009, on the economic convulsions under Koizumi, stated, “After a decade of corporate cost-cutting and labor market deregulation, more than a third of all employees in Japan are non-regular workers without job security — part-timers, contract workers and temps. That’s a sharp contrast from the 1980s, when more than 80 percent of workers had job security.”

Koizumi further exacerbated social divisions during his leadership. Hence, Kishida is promising a new way to escape this spiral by promising to tackle social inequality.

Research by Mizuho stipulates that households in the 3 million yen ($26 thousand US dollars) bracket have suffered the highest since the coronavirus crisis began. In general, this income group is earning less money now than in 2019. However, for households earning 10 million yen, the opposite is happening. This concerns stronger bonuses last year and so on. Therefore, a buoyant stock market, real estate market increase in central Tokyo, and so forth: means the respective capital and profit base for the richest in society is booming.

Thomas Sowell famously said, “The rich can more easily convert their assets from money into things like real estate, gold, or other assets whose value rises with inflation. But a welfare mother is unlikely to be able to buy real estate or gold.”

Sowell said the above concerning America. However, it applies internationally. Thus despite Japan being known for low inflation in recent decades, the coronavirus convulsions are altering this. Therefore, the increase in consumption tax (in recent years) paid by rich and poor alike – along with recent inflationary prices from the cost of electricity to flour – equates to more economic pressure on the poorest in society.

Low-income individuals and workers in non-regular employment have borne the brunt of the economic impact of the coronavirus crisis. This notably concerns people working in the entertainment sector, hotels, restaurants, warehouses that supply storage for these angles, and so forth.

The analyst Rikuto Minami (Mizuho) is worried about other social convulsions. NHK reports, “According to his calculations, low-income families have cut educational expenditure by 15.1% in 2021 compared with 2019. During the same period, higher-income families increased equivalent spending by 4.8%.”

The increasing cost of living is like a hidden tax on the poorest in society. Hence, the educational divide between rich and poor means that more doors will be closed on children from the working poor after leaving school.

The only certainty since Koizumi in recent years is greater social inequality. Similarly, the military budget continues to increase in recent times – including under Kishida. This concerns the containment policies enacted by America against China and the Russian Federation: this is rubber-stamped by the ruling Liberal Democratic Party.

Time will tell if Kishida is sincere about tackling social issues.

Modern Tokyo News is part of the Modern Tokyo Times group

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