Japan has a reputation for having one of the highest national well-being rates because of its prestigious education, successful healthcare systems and attractive culture. This perception is backed up by Japan holding 14th position in the global quality of life ranking and 16th in Gross domestic product (GDP). Consequently, the country stands out as a highly favored travel destination, attracting more than 23 million tourists in 2023. These visitors often buy into the idea of the lack of poverty in Japan.

However, according to the 2022 Basic Survey on National Living published by the Ministry of Health, Labor and Welfare, Japan’s poverty rate was 15.4%, the highest among the Organisation for Economic Co-operation and Development (OECD) members then. This raises the question: How does the country keep its poverty issue relatively concealed?

Historic Cause of Poverty in Japan

Modern Japanese poverty is often attributed to the “Lost Decade,” a period from 1991 to 2001 caused by a heightened Bank of Japan interest rate and characterized by real estate equity values lowering 70% through the decade. Before the “Lost Decade,” Japan was seen as the epitome of economic prosperity. It had an economic system called “keiretsu,” promoting entrepreneurship by forming a close-knit group of businesses able to invest in each other through the national bank.

Keiretsu allowed an entrepreneurial cushion for businesses to test new products before exporting them internationally, which, in turn, boosted the country’s economy. However, as the rapid growth of the Keiretsu system continued to succeed, the banks, also believing the government cushioned them, took riskier investments and eventually began to fail.

The Japanese government attempted to create new jobs by building new infrastructure. Similarly, the Bank of Japan boosted its monetary base by 60% with the quantitative easing program. However, deflation and fiscal deficit persisted, even as the nation exited the “Lost Decade.”

The Cultural Intersection With Poverty

Along with the economic growth, often called the “bubble economy,” there was a movement of “Nihonjinron,” the idea of defining the Japanese culture and identity. Though the concept of assuming a single, homogeneous Japanese identity was problematic, it provides a loose definition of Japanese sentiment at the time as prizing economic advancement, collectivism and a level of modernization.

However, after the “Lost Decade” and its ensuing insecurity, Japanese culture took on a “no excess” mentality, no longer prioritizing economic advancement by allowing for riskier odds. Economically, this lowered Japan’s place in the rapidly expanding world economy. Socially, this created a mindset centered around economic stability, thoroughly tabooing open poverty.

The manifestation of the nonacceptance of open poverty can be seen through Shinjuku Central Park in Tokyo. Though the park is filled with unhoused people at night, during the day, the individuals pack their belongings, often into remote, makeshift shelters or stay in government-funded homeless encampments. People living in poverty also do not typically ask for money and stay away from popular locations. This furthers the illusion of Japan’s lack of poverty.

Final Remark

With Japan’s rising poverty rate, the country has been implementing programs such as soup kitchens, public awareness campaigns, mental health support and the Housing First approach, which provides shelter to people without homes. However, as long as poverty in Japan remains invisible, it will not receive the aid it needs to help those in need to access just support.

– Aria Desai
Photo: Flickr