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Class 4 handout blog

Class 4 handout blog

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Class 4 handout blog

  1. 1. Japan in the 21st Century Spring 2017 Robert Croker, CJS, Nanzan University 1 Japan in the 21st Century Robert Croker Japanese Society II: Contemporary Japan Center for Japanese Studies Nanzan University 1. Demographic Change: demography is destiny population pyramid Review 1. demographic change: demography is destiny population is falling very low birth rate ageing population inverted population pyramid 2. Economic Change: macroeconomic blues Ohtake, F., Kohara, M., Okuyama, N, Yamada K. (2013). Growing inequalities and their impacts on Japan. GINI Country Report Japan 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 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2010U.S.dollars 0 20 40 60 80 100 120 1970-01-01 1971-08-01 1973-03-01 1974-10-01 1976-05-01 1977-12-01 1979-07-01 1981-02-01 1982-09-01 1984-04-01 1985-11-01 1987-06-01 1989-01-01 1990-08-01 1992-03-01 1993-10-01 1995-05-01 1996-12-01 1998-07-01 2000-02-01 2001-09-01 2003-04-01 2004-11-01 2006-06-01 2008-01-01 2009-08-01 2011-03-01 real GDP per capita
  2. 2. Japan in the 21st Century Spring 2017 Robert Croker, CJS, Nanzan University 2 Ohtake, F., Kohara, M., Okuyama, N, Yamada K. (2013). Growing inequalities and their impacts on Japan. 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). 0 50 100 150 200 250 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Review 2. economic change: macroeconomic blues little real growth in the economy long-term deflation little growth in real wages growing government debt – but not effectively used to reduce poverty 3. Socio-economic Change: (not) sharing the pie GINI Country Report Japan Page 28 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. 0 10 20 30 40 50 60 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (%) Total Male Female number of ‘non-standard’ workers Ohtake, F., Kohara, M., Okuyama, N,Yamada K. (2013). Growing inequalities and their impacts on Japan. poverty rates by age Ohtake, F., Kohara, M., Okuyama, N,Yamada K. (2013). Growing inequalities and their impacts on Japan. GINI Country Report Japan 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. 0,00 0,02 0,04 0,06 0,08 0,10 0,12 0,14 0,16 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75- PovertyRate 1984 1994 2004 definition: poverty rates before taxes and transfers … and after taxes and transfers OECD overall: before tax – high after tax – much lower Japan overall: before tax – low after tax - higher over time: increasing inequality, before tax and after tax reducing the poverty rate
  3. 3. Japan in the 21st Century Spring 2017 Robert Croker, CJS, Nanzan University 3 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 14.9 13.3 12.3 12.1 10.9 10.2 8.8 8.5 8.4 8.1 7.3 7.3 6.5 6.1 6.1 5.3 4.7 0 5 10 15 20 25 Child 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 before taxes 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 Child poverty rate (% of children living in households with income lower than 50% of the national median income) 0 10 20 30 40 50 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. 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 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 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). Review 3. socioeconomic change: (not) sharing the pie steady employment rates for males and females unemployment rates sometimes higher for youth higher salaries for men than women constant salaries for older workers falling salaries for younger workers increasing number of ‘non-standard’ workers Review 3. socioeconomic change: (not) sharing the pie increasing poverty in 20s to mid-40s falling poverty for older, retired workers higher salaries and lower poverty in central Japan growing perceptions of inequality more people on welfare, but mostly older people government policies do not reduce young poverty high relative poverty for children

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