Japan Nikkei High is a Mirage: Cheap Labor and Poverty

Japan Nikkei High is a Mirage: Cheap Labor and Poverty

Kanako Mita, Sawako Utsumi, and Lee Jay Walker

Modern Tokyo Times

The Japanese Nikkei stock exchange reached 39,000 concerning many factors. However, irrespective of the factors, it means little to vast numbers of Japanese people who struggle to survive in an increasingly divided nation.

In the United Kingdom, the minimum hourly adult rate in April will increase to 11.44 pounds (2,179 Japanese yen). In contrast, most prefectures in Japan pay less than 5.00 pounds per hour (950 yen) based on the current yen-to-pound exchange rate.

Even in Tokyo, the minimum hourly rate is a shocking 5.84 pounds (1113 yen). Of the 47 prefectures, 13 pay 900 yen or less (4.72 pounds). When you add paying 10% consumption tax every time you go shopping for food and other essential items – and paying towards health care – it highlights how poverty is a reality for many Japanese people.

Pension worries and the increasingly high cost of living entail that slightly over 33% of people aged between 70 and 74 are still in the workforce. This figure is over 50% for people aged between 65 and 69.

Most of the above workers (not all) are similar to the exploitation of women being a conveyor belt for cheap and limited contract labor – work in low-paid work. Hence, a million miles away from the capitalists celebrating the Nikkei reaching 39,000. Therefore, social disparities in Japan – where cheap labor and the disparities between prefectures – are the norm.

In the 1990s, the labor market entered a period of deregulation. Accordingly, with stagnant wages and reduced working rights since this period, approximately 40% of the workforce are non-regular workers.

The working poor – are just that. Hence, public assistance is minimal for this group of working people. In truth, while Japan is a G7 nation, it feels far from that for many people (working poor, poor pensioners struggling to survive, and women who are exploited by the labor market in countless sectors).

The International Monetary Fund (IMF) said, “Japan’s unemployment rate remains relatively low compared to other OECD countries. However, Japan’s poverty rate among the working-age population is one of the higher ones among OECD countries. The public assistance program in Japan does not provide adequate income support for the working poor and creates inherent work disincentives.”

Average wages in Japan ranked 24 out of the 35 leading nations according to the OECD (2021) report. Therefore, wages in Japan are now 20% below the OECD average.

The average person from December to December (2021-2022) became 4% worse off – because of the cost of living crisis that continued throughout 2023.

The rise of the Nikkei stock exchange is hitting the headlines. However, it is a mirage for tens of millions of people who are struggling and where the minimum wage is extremely low.

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.”

Japan is a nation that utilizes the working poor, temporary workers, and women who are often deemed to be cheap labor or contract workers. This is topped off by an inadequate welfare system for people who fall through the net. This concerns regulations when sick and so forth.

Indeed, even when people claim benefits during times of need, they are blighted by paying taxes from previous earnings because of the system implemented in Japan. Accordingly, individuals who are struggling are pressured to find work quickly. This usually entails temporary contract work. Therefore, the cycle of poverty and uncertainty continues.

Yes, the rich are celebrating because the Nikkei stock exchange hit 39,000. However, for the working poor and others who are marginalized, the only certainty is that little will change apart from continuing exploitation and hardship.



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