Japan’s support to UkraineSince Feb. 24, 2022, Ukraine has been in armed conflict with Russia, which has caused significant deterioration in Ukraine’s economy and an increase in poverty. However, the international community has been quick to come to Ukraine’s assistance. In particular, Japan has provided several essential services to Ukraine through the Japan International Cooperation Agency (JICA). Here is a breakdown of Japan’s support to Ukraine since the recent escalation of the Russia-Ukraine conflict.

Poverty Increase in Ukraine

The humanitarian situation in Ukraine has worsened significantly since the start of the conflict. Approximately 34% of households reported having no income or relying on assistance as of April 2022. The country’s unemployment rate has drastically increased to 34% in 2022, according to the National Bank of Ukraine. However, the actual rate is likely more severe as “so many people in Ukraine had undeclared jobs before the invasion,” NPR says. This is a stark increase from the 8.9% unemployment rate recorded in 2021, according to World Bank data.

This increase corresponds to a third of the population suffering from food insecurity. Food insecurity affects some oblasts (provinces) more severely than others, with provinces in the east and south reporting food insecurity rates of 50%. Luhansk notes the highest food insecurity rates across all oblasts. Further, the Ukrainian economy is projected to contract by close to 32% by the end of 2022.

The easternmost oblasts of Donetsk, Kharkiv and Luhansk are disproportionately affected by the conflict. A greater presence of landmine contamination, continued damage to infrastructure and a generally higher risk of Russian targeting makes these areas less accessible for aid and commerce.

JICA Support

Japan’s support of Ukraine since the beginning of the conflict has three focal points:

  1.  Assistance to attain financial stability.
  2. The “improvement of people’s lives and environment.”
  3. The “promotion of autonomous governance and internal reconciliation.”

The first measure the JICA took to help Ukraine in March 2022 came in the form of “a needs assessment survey team for humanitarian and medical assistance,” the JICA website says. The JICA dispatched this medical team to Moldova to assist with the influx of Ukrainian refugees. The team collaborated with the World Health Organization and the Moldovan Health Ministry to help strengthen already existing systems and also provide advice on resource allocation and data management as the crisis continues to unfold.

ODA Loans

Additionally, on May 16, 2022, the JICA signed an Official Development Assistance (ODA) contract, giving a 13 billion Japanese yen loan to support Ukrainian economic stability. However, this amount was not adjusted in light of the scope of the war, and so, on June 17, Japan modified the original ODA to give an additional 65 billion yen to Ukraine. This combined total is equivalent to a 78 billion yen loan. As stated on the JICA website, the loan’s goals include “fostering de-monopolization and anticorruption institutions, strengthening land and credit markets and bolstering the social safety net… by offering financial assistance to Ukraine, which is facing an economic crisis due to the impact of a military invasion.”

Lastly, in late June 2022, the JICA gave its first of “a series of online seminars” designed to help advise Ukrainian officials in waste and debris management amid the war. Oblasts that are particular targets of the Russian military have experienced a high level of infrastructural damage, contributing to transportation and waste management issues. Considering Japan’s experience with these matters, the JICA hopes to share its expertise and contribute to Ukraine’s stability and crisis recovery.

Looking Forward

For Ukraine to endure during these times while safeguarding the well-being of citizens, it is essential to sustain support efforts like those demonstrated by the JICA. It is likely that Japan’s support to Ukraine will continue to play a critical role as the war unfolds.

– Xander Heiple
Photo: Flickr

Helping Single Mothers
Around the world, 13% of women are single mothers with children under 15-year-old, according to research. However, in Asia and Sub-Saharan Africa, there are 25% and 32% of single mothers, respectively. One direct consequence caused by single motherhood is child poverty and this correlation between child poverty and single mothers do not exist without reasons. For instance, since single mothers tend to have relatively lower incomes, their children are unlikely to receive complete education, limiting their career options. In turn, this makes the single mothers and their offspring more difficult to escape poverty, thereby forming a poverty cycle. Yet, some international organizations are helping single mothers by providing guidance and support, both mentally and financially. 

Littleones (Japan)

Among the 34 OECD countries, Japan has the highest poverty rate for single mothers. Approximately 48% of single-mother families have no more than 500,000 yen or $3,500 USD of savings. Despite the depressing figures, there is the NGO, Littleones, meaning “little children.” According to the organization, its objective is to support children in both big and small ways since “children are the hope of the future.”

Focusing on single families in Tokyo, Littleones helps needy families in three different ways. First, to organize social events such as hiking and Christmas parties, allowing mothers to build friendships and establish solidarity. Second, to advise mothers on issues including education, legal matters and employment opportunities. Third, to help those mothers to find suitable housing.

Empowering Young African Single Mothers (EYASM) (Cameroon)

In Cameroon, it is common to find many single mothers between their 20s and 30s. Single mothers live in poverty and the public also discriminates against them. However, the government has not done much to help single mothers. Therefore, Empowering Young African Single Mothers has taken the lead. Similar to Littleones, EYASM believes that “children of today are the leaders of tomorrow.” Such conviction leads the NGO to a series of objectives, for example, to help children break the poverty cycle and encourage single mothers to establish self-reliance, self-esteem and self-awareness.

One interesting project that EYASM did in 2020 was the Single Mothers Empowerment Contest, in which the top five winners received money as prizes. The purpose of this was to encourage single mothers to become entrepreneurs for livelihood. 

Korean Unwed Mothers Families Association (KUMFA) (South Korea)

The conventional social conceptions in Korean society make single mothers harder to sustain themselves and their families – the public perceives them as sexually promiscuous. Consequently, finding a stable job becomes a challenge for unwed mothers. Yet, the government does not provide sufficient financial support to them. According to the National Statistical Office and Bank of Korea, while the monthly income of the average Korean family was 4 million won in 2017 or $3,640 USD, only 200,000 won or $180 USD a month for single parents with an income of less than 1.55 million or $1,400 USD.

KUMFA aims to protect the maternal rights of single mothers and establish a support network for the mothers to exchange information. Moreover, the NGO also practically helps single mothers – providing shelter for them and their children.

Hong Kong Federation Of Women’s Centers (HKFWC)  (Hong Kong)

According to the government’s thematic report on single parents in 2016, Hong Kong had approximately 56,515 single mothers, with an average monthly income of 12,000 HKD or $1,520 USD.

Similar to other organizations, HKFWC understands the need to establish a community for single mothers. Calling the project “You’re Not Alone,” the organization matches volunteers with the same background as single mothers, forming a more personal relationship.

Looking Ahead

Overall, it is more challenging for children coming from single-parent households to break the poverty chain. However, international organizations are helping single mothers, changing the lives of many single-parent families.

Mimosa Ngai
Photo: Wikipedia Commons

Japan is an affluent country with an industrious workforce and is one of the world’s largest consumer markets. However, with a 15.4% poverty rate, poverty does exist in the East Asian country. In addition to poverty, HIV/AIDS in Japan is a major concern. Specifically, a significant portion of HIV cases still goes undetected until they progress to AIDS. Japan is working with the United Nations Programme on HIV/AIDS (UNAIDS) to rectify that and to improve HIV/AIDS treatments.

Background on HIV/AIDS

Human immunodeficiency virus (HIV) attacks and weakens the body’s immune system by destroying CD4 cells, which leads to a higher risk of contracting other infections, viruses and diseases, such as tuberculosis and specific cancers. In 2021, 38.4 million people around the world were living with HIV, but only 75% had access to treatment therapy. Of those who were tested in 2021, 15% were unaware of having HIV or symptoms. A key problem in Japan is that the number of people unaware of their HIV status is at least double that rate.

Symptoms of HIV may not be noticeable within the first few months and could be mistaken for influenza. However, as the symptoms progress to having possibly swollen lymph nodes, weight loss, diarrhea, fever or cough, people should take a test to determine the diagnosis. HIV spreads through unprotected intercourse, the sharing of needles and blood transfusions, all due to the sharing of specific bodily fluids.

By using protection during intercourse and not sharing needles, people can prevent HIV spread. If infected people take antiretroviral treatment (ART), they can keep their viral load low and prevent transmitting HIV to others. If they do not use ART, their viral load will rise and HIV progresses to (Acquired Immunodeficiency Syndrome) AIDS. People with AIDS have extremely low immunity and are vulnerable to life-threatening infections. Mothers can take ART to prevent mother-to-child transmission through pregnancy, delivery and breastfeeding.

The State of HIV/AIDS in Japan

The annual number of new cases of  HIV/AIDS in Japan remained relatively flat or slightly declining from 2006 to 2019 at about 1300 cases. Still, HIV/AIDS in Japan is a concern because from 1985 to 2019, physicians diagnosed 19,216 men and 2,523 women with HIV. During the same period, physicians diagnosed 9,646 people with AIDS, and they reported 720 deaths.  In 2019, 72% of the new 903 cases were men who had sex with other men. The majority of these men were 20 to 40 years old.  In the same year, heterosexual contact contributed to 11% of new male cases and 27 of 29 new female cases.

The number of cases undiagnosed as HIV and diagnosed as AIDS is a key concern for HIV/AIDS in Japan. Annually, about 30% of new cases nationwide are diagnosed through AIDS onset which means that they were not diagnosed as HIV cases before they progressed to AIDS. Further, the discrepancy between the number of rural versus urban cases of HIV that have progressed to AIDS before diagnosis has been a concern. In 2009, the discrepancy in rural areas of the Aichi region was almost double that of the region as a whole.  In Sapporo in the Hokkaido region cases diagnosed as AIDS were 27.3% in urban areas and 87.3% in rural areas where tests are less accessible. These discrepancies led the Ministry of Health, Labour and Welfare to call on local governments to implement more HIV testing programs in rural areas.

Progress to Date

In December 2020, UNAIDS launched new HIV/AIDS prevention goals. The 95-95-95 goals aim to ensure that 95% of people living with HIV know their status, 95% of them are on ART and 95% of those on ART to have viral suppression by 2025. Japan is currently working to meet UNAID’s 95-95-95 target. In fact, UNAIDS and Japan’s National Center for Global Health and Medicine (NCGHM) entered into an agreement in 2020 to promote awareness of HIV symptoms and prevention, including a campaign during the 2022 Summer Olympic and Paralympic Games. There is also health insurance and social support in Japan. Third, Japan is testing treatments to find the most effective one. One such drug is Dovato, which is an oral drug available for both adults and children over 12.

While Japan offers doctors and patients a host of the original ART, many of the newer medicines that are available in Western countries and generic ART are not available in Japan at this time. Also, mouth ulcers are one of the first signs of HIV infection, and patients with mouth ulcers have trouble swallowing pills. Pharmaceutical Technology underlined that due to the need to run clinical trials in Japan versus just accepting the results of trials run elsewhere, the Japanese market does not have enough injectable medicines available for these HIV/AIDS patients.

Looking Ahead

It is clear that there is a need to raise awareness of HIV/AIDS in Japan. Early diagnosis and treatment are key. The government’s work with UNAIDS and its treatment testing campaign should help Japan get on track with the 95-95-95 goal.

– Deanna Barratt
Photo: Flickr

Single mothers in Japan
In Japan, 56% of families headed by single mothers are living below the poverty line. This is the highest of all the OECD nations, with the U.S. coming in a faraway second at 33.5%. Single mothers in Japan struggle enormously, despite living in one of the wealthiest countries in the world. This is the result of a toxic confluence of social expectations, corporate stigma and government negligence.

The Cause of Poverty Among Single Mothers in Japan

The original cause of this high level of poverty has roots in expectations about family environments. The social structure in Japan is very specific and well-established. There is an assumption, especially from the government, that every household consists of two people raising their children. In addition, it is widely expected and common for women to give up their careers and stay home to raise children. About 70% of Japanese women do just that. 

However, as the divorce rate rises in Japan, this expectation is becoming a direct driver of poverty. There is no existence of the legal concept of joint custody in Japan and women are most commonly fully responsible for their children post-divorce. Less than half of the women receive any alimony or child support payments at all.

As a growing proportion of Japanese women become the sole provider for their families, they are taking on more economic responsibility. However, their economic rights and opportunity have not increased in tandem. This is what leads directly to poverty for single mothers in Japan. Women usually are only able to secure low-paying and part-time work, if they can get a job at all. Only 43% of Japanese mothers that want to return to the workforce are able to. Even if the mothers manage to snag a job, women earn 30% less than men for the same work in Japan. 

Government Response to Divorce-Related Public Benefits

The government’s response to the issue worsened this phenomenon. As divorce rates rose and more single women applied for public benefits, the government implemented reforms to cut back on these social safety nets. In 2003, the government reduced allowances and tacked income and time limits to benefits. Even when available to mothers, twin stigmas about being poor and being divorced disincentivize struggling mothers from even accepting public benefits. Activists maintain that this stigma has led to only 200,000 of the 3.5 million eligible children receiving the financial assistance they are entitled to.  

Left with extremely limited employment options and meager government support, single mothers in Japan and their children are vulnerable to falling below the poverty line. 

Little Ones

Luckily, a nonprofit operating in the Tokyo area known as Little Ones is directly assisting single mothers and children in the everyday struggles they face. Little Ones focuses on supporting impoverished children by providing employment, housing and networking services to single parents in the country. Kunihisa Koyama, a social activist in Japan, founded the organization in 2008. The organization has since been able to house upwards of 300 single mothers

Little Ones has identified isolation as a key factor in mothers’ poverty and the organization hosts regular gatherings and barbecues to allow single mothers to connect and create a supportive community amongst themselves. Further, the organization supports employment by helping single mothers secure and prepare for interviews, even assisting with such small details as makeup techniques. To support mothers in housing, Little Ones assists with the housing search, ensuring that mothers can be in a place that meets their needs.

Looking Ahead

Finally, on top of all this meaningful work to reduce poverty among single mothers in Japan, Little Ones also works to raise awareness about this little-known issue. As there is not much coverage of the hardships that single mothers in Japan face, this organization is doing important work by getting the word out. It is inspiring to know that someone is working to support these mothers who face so many social and economic roadblocks. With continued work and progress on this issue, poverty in Japan will be sure to decline.

– Grace Ramsey
Photo: Flickr

reed-willard-practice-edit-the-effects-of-japans-minimum-wage-increase
In early August 2022, Japan’s Ministry of Health, Labor and Welfare announced an increase of the country’s minimum wage by 3.3%. In addition to fighting the effects of rising inflation, Japan’s minimum wage increase expands Prime Minister Fumio Kishida’s “new capitalism” agenda to tackle issues of income inequality.

Push Factors for the Minimum Wage Increase

Japan’s minimum wage rate of ¥930 ($7.07) per hour was low for significant economic power. Australia boasts the highest rate at $14.88 per hour, but Japan also falls behind the United Kingdom (£9.50), France (€10.60) and Germany (€9.80). The Japanese minimum wage now stands at ¥961 ($7.30) per hour and surpasses the United States federal minimum wage of $7.25 (though some states have a higher minimum wage through state laws).

Despite Japan’s low unemployment rate, Japanese workers have barely seen any increases in minimum wages since 2000. This is due to the country’s chronically low inflation rate, which pushed companies to cut labor costs rather than risk driving away consumers by increasing prices.

However, the disruption of global supply chains caused by the Ukraine War has increased import costs. This has, in turn, compelled businesses to raise the price of goods. Real wages adjusted for inflation fell by 1.8% in 2022 compared to the previous year which means the increased inflation is hurting Japanese spending power.

Japan’s minimum wage increase is part of prime minister Kishida’s “new capitalism” agenda to reduce income inequality. The reform aims to relieve the burden of increased living costs on the lower class, while also sheltering the country from losing its post-pandemic economic recovery. Kishida plans to eventually raise the median average minimum wage to ¥1000 ($7.51).

Lifetime Employment System

The delay in Japan’s minimum wage increase also stems from the country’s employment structure. Termed the “lifetime employment system,” it underwent development during the economic growth of the 1950s and 60s. Within the system, companies stress job security rather than increased short-term productivity by following three pillars:

  1. Companies implicitly promise to care for employees until retirement.
  2. Seniority dictates wages.
  3. Labor unions are usually based within the company and negotiate with management to decide wages.

Under the lifetime employment system, Japan’s minimum wage increase was gradual. However, in the early 2000s, Japanese companies struggled to overcome competition from emerging-market economies such as China. Since then, firms have shifted to using more part-time workers by reducing the number of workers in the lifetime employment structure. Though part-time workers’ wages rise faster than regular workers, they still receive significantly less pay.

Moreover, in 2021, only 16.9% of Japanese workers belonged to a labor union, meaning that many workers rely on government reforms to see a pay increase. In Japan, the national minimum wage rate is only a reference point. The Labor Ministry’s subcommittee splits prefectures into four groups and sets guidelines for each. The prefectural governments then set the rate depending on their needs. Therefore, each prefecture’s rate may be lower or higher than the national rate.

The Rising Japanese Lower Class

The Japanese middle class continues to diminish as more and more workers switch to part-time work and fall into the lower class, increasing their exposure to poverty. In 2020, 15.7% of Japanese people lived in poverty, which the OECD defines as having an income that is less than half of the entire population’s median.

Married Japanese women often rely on low-paying part-time jobs or temporary work, meaning they depend financially on their partner. This reliance makes women more likely to stay in a marriage with domestic abuse. If women leave the marriage, they are more susceptible to poverty. Older women, single mothers and young women who end up in the sex industry are especially likely to live in poverty or become homeless.

Along with the traditional gender roles leading married women to work less than their partner, Japan has a tax advantage for married couples when one member earns less than ¥1.03 million ($7,729.64) a year. Hence, many women may limit their working hours to avoid entering the next tax bracket.

A First Step

The 2022 rise in inflation left Japan’s lower classes especially vulnerable to living in poverty. Japan’s minimum wage increase may be the first step in helping shelter the population from a cost-of-living crisis. However, Fumio Kishida’s “new capitalism” may also have to address tax policies as well as the increasing shift to part-time work to fully tackle poverty reduction in Japan.

Elena Sofia Massacesi
Photo: Flickr

Renewable Energy in Japan
In 2019, Japan stood as one of the largest oil and coal consumers in the world but is now Asia’s “third-largest producer of renewable energy.” Renewable energy in Japan is on the rise.

Overcoming Challenges

Transitioning to renewable energy has its challenges. The cost of solar energy in Japan is high, land use restrictions limit the potential for wind power and Japan’s power grid “is segmented and consists of many smaller grids with weak interconnections.” Even so, a net zero society is still a feasible goal for the nation.

Progress

In 2021, renewables made up about 22% of total electricity generation, which is two percentage points higher than in 2020. Solar and wind power have become much more prominent thanks to the Renewable Energy Act, which became effective in 2022. This act defines renewable energy as solar, biomass, wind, geothermal and hydropower.

Additionally, the Japanese government is planning on establishing wind power as a cheaper energy source than thermal energy and aims to reach this goal by 2035. Japan aims to accomplish this mainly by increasing its generation of wind energy. Making wind power more affordable will be especially impactful for low-income communities because low-income communities in Japan have a much higher energy poverty rate than their more wealthy counterparts.

Clean Energy Decreasing Poverty

Improving access to clean energy reduces poverty by increasing access to education and improving public health. Japan has been noticing the need for clean energy along with the need for reducing poverty. Here are some ways the country is taking action on both at the same time:

  • The Japan-U.S. Clean Energy Partnership (JUCEP). The U.S. and Japan formed this partnership in 2021 to assist nations across the world, especially in the Indo-Pacific, “to accelerate their decarbonization efforts while achieving energy security and sustainable growth by deploying clean, affordable and secure energy technologies.” The goals of JUCEP include renewable energy transitions through the use of “geothermal, wind, solar, hydropower and critical minerals.” The overall aim is to move toward sustainability and energy security in the Indo-Pacific.
  • The Strategic Energy Plan. Japan’s Agency of Natural Resources and Energy published the sixth revision of this plan in 2021. The plan’s goal is to scale up renewable energy, decrease the need for fossil fuels and add hydrogen and ammonia as energy sources. As part of this plan, the Clean Energy Strategy aims to ensure utility operators and individuals can adjust their manners of working and living to align with carbon neutrality. In addition, the plan aims to reduce the costs of renewable energy to ensure accessibility, among other goals.

Looking Ahead

With the rising costs of electricity and the unsustainability of fossil fuels, the world is realizing the importance o transitioning to renewable energy. Countries, such as Japan, are not only looking to move toward clean energy but are also prioritizing the accessibility of renewable energy so that it can benefit all people regardless of income level.

With these developments and more to come, the future looks bright for renewable energy in Japan. By 2030, the country expects to derive 60% of its power from clean energy sources and is set to achieve full carbon neutrality by 2050.

– Ava Ronning
Photo: Flickr

Japan’s Middle Class
Although the Japanese economy is the third largest in the world according to its nominal GDP, its middle class has begun to contract. Unemployment and poverty resulting from COVID-19 revealed new patterns of decreasing consumerism and stagnant wages. While Japan’s middle class is slowly disappearing, there are a few solutions from both corporate policy and grassroots organizations that are attempting to alleviate poverty and reinvigorate citizens with low income.

Poverty in Japan

In the 1980s, the once booming Japanese economy met economic stagnation during the 10 years known as the “Lost Decade,” spanning from 1990 to the early 2000s.

Before the crisis, which the real estate market caused, Japan’s annual GDP growth rate was 0.82% higher than that of the United States. However, the bursting of the real estate bubble lowered Japan’s growth rate to a feeble 1.14% during the Lost Decade. Many view the Lost Decade as one of the events that began the fading of Japan’s middle class.

From 2020 to 2021, estimates stated that one in six people living in Japan lived in relative poverty. According to some workers, open work is scarce in the aftermath of the pandemic, and Japanese media seldom covers these stories of hardship. Notably, women, who often take retail jobs with temporary contracts to balance work with childcare, experienced economic hardship after most retail shut down during the pandemic. In early 2020, around 40% of the labor force took on “non-regular” jobs, which pay lower wages and often end in swift termination.

Japan’s Middle Class

According to Oxford Economist Shigeto Nagai, a drop in consumer spending could follow the shrinking middle class. In 2020, after a steep increase in sales tax the year before, COVID-19 caused consumer spending to plummet further. Japan’s Ministry of Economy, Trade and Industry reported a 12.3% decline in retail consumption from 2019. More than 10 million Japanese citizens earn less than $19,000 per year, and having less disposable income exacerbates the issue of falling consumer spending.

A “life-time employment system” also contributes to the shrinking of Japan’s middle class. Companies value taking care of employees after retirement as well as seniority-based wages. This results in an emphasis on long-term company loyalty, and raises in wages are difficult to achieve. However, as previously mentioned, nearly half of the labor force participants work in non-regular jobs. This poses a significant problem to middle-class households in which stability is a necessity.

Alleviating Poverty

Established in 2000, the World Bank and the government of Japan conceived The Japan Social Development Fund (JSDF) to alleviate the effects of the Lost Decade. Since its founding, the government has provided approximately $855 million to support its projects. These projects aim to reach the population that often cannot access aid from charitable organizations, and intends to empower and protect impoverished communities. Similarly, small, grassroots organizations in Japan help alleviate poverty by providing support for their prefectures. For example, groups such as Food Bank Kochi and NPO Gift provide food and activities for communities that have become impoverished. The Kagoshima Volunteer Bank, which aims to teach and care for single-family households, provides educational services to communities.

In regards to the corporate world, economist Shigeto Nagai has suggested that start-ups in Japan will offer higher wages to new workers and recent graduates as compared to established corporations and that this type of shift in the labor sector could ultimately increase the economic flexibility of the middle class.

– Caroline Zientek
Photo: Flickr

Rising Income in JapanWith inflation leading to soaring prices, effective government intervention is crucial to solving people’s hardships. Recent reports suggest that Japan may be able to teach the world a lesson in this regard. Japan’s economy has maintained a mild deflationary state for decades and overall prices have been relatively stable. However, this year, the island nation has rarely ushered in 2% inflation against the backdrop of rising prices around the world. While Japan’s price hikes are nothing compared to many other countries, unchanged wages are making life more stressful for consumers caught off guard by inflation. Fortunately, the Japanese government has introduced some effective measures against the wage issue, which have improved the lives of ordinary Japanese people. This article will briefly explore the topic of rising income in Japan recently.

Increasing Minimum Wages

Japan’s Central Minimum Wage Council recently issued a new policy, which is to raise the minimum wage standard across Japan by ¥30 per hour. This is the largest minimum wage increase ever issued by the Japanese government. Rising domestic prices stimulated this policy in Japan due to the sluggish yen and the Russian-Ukrainian war. The policy ensures the rights and purchasing power of ordinary Japanese workers.

Senior officials of the Japanese government have also attached great importance to basic wages and livelihood issues. In an interview with reporters, Deputy chief cabinet secretary Seiji Kihara said that raising the minimum wage is an investment in the people and he hopes that the rising trend of basic wages can keep up with the development of new capitalism.

Rising Total Income in Japan

In addition to setting requirements for basic wages, the Japanese government not long ago encouraged Japan’s major companies to raise workers’ wages on the premise of rising prices. In fact, the government wants companies to raise wages to the same extent as prices rise. This major move came with the support of Japanese Prime Minister Fumio Kishida’s economic policy. In fact, it was he who promised to bring New Capitalism to voters, which requires “a virtuous cycle of growth and redistribution driven by investment into people,” according to Japan Times.

Many Japanese companies have followed suit, including major car companies such as Toyota and Hitachi. They heeded the government’s call, even though their business was hurt by soaring oil and wheat prices as a result of the Russia-Ukraine war. In February 2022, Labor unions of major electronics and car manufacturing industries planned to raise workers’ wages by around ¥3,000.

The rising income in Japan during hyperinflation is the result of the government’s efforts to ensure a virtuous circle of the economy, as well as maintain the normal living standards and purchasing power of the people. Although the world economy in 2022 could cause difficulties for many countries, the Japanese government’s practical actions tell us that every government may have a role in caring for the needs of the people.

– Ella Li
Photo: Flickr

Unemployment in Japan
Reports at the end of May 2022 showed that unemployment in Japan had been on a decreasing trend for three consecutive months, with the job-to-applicant ratio rising for four months in a row to 1.23. Noting that, this country’s unemployment rate is also significantly lower than in many other wealthy states.

Experience of Japan’s Job Market During COVID-19

It is reasonable to imagine a harsh hit on job seekers everywhere as COVID-19 spreads globally. By July 2021, the pandemic had taken 22 million working positions away from people in advanced countries. However, many have figured out how to cope with the impact of COVID-19. Japan is a country that has done so.

On the one hand, Japan could not entirely escape the adverse effects on employment during the pandemic. In April 2020, approximately three months after China experienced the first significant breakout of COVID-19, the Japanese government ordered emergency acts that postponed many paid employment. Within a month, the unemployment rate in Japan rose by 0.1%, reaching 2.6%.

On the other hand, the Japanese job market started to revive and the unemployment rate in Japan has generally been decreasing since then, despite some ups and downs. According to MENAFN, by April 2022, Japan’s unemployment rate was 2.5%, even lower than it had been two years earlier.

Among all the members of the OECD, the unemployment rate in Japan is low and steady even in the pandemic era. The U.S. youth unemployment rate reached 15.1% in 2020 and the Euro area’s rate has never gone below 7% since the COVID-19 breakout. However, Japan’s unemployment has never exceeded 4% during that same period.

What Has Given the Japanese Job Market Relative Stability?

Japanese enterprises do not easily place the need of shareholders over employees’ welfare as they prioritize the long-term sustainability of the business instead of maximizing growth. Therefore, this resulted in fewer people losing their jobs as a result of the pandemic.

The social context of Japan is very different from that of Western countries. The Japanese working environment is very high-pressure. Twenty-two percent of Japanese workers had to work more than 50 hours a week despite the fact that the official working hour is 40 hours per week.

The Japanese government implemented effective measures to ensure its citizens’ job security. The government provided subsidies for employers. Subsidies paid for part of the compensation to the workers who had to go on leave, so the companies would not have to fire them. Additionally, the application process for the subsidies was easy.

One should note that people who are still holding occupations but are not practically working do not count as unemployed. For example, if an employer postponed some of his workers’ work (i.e. force them to take on leave), these people would not be unemployed. Thus, the employment rate indicator does not address many families with difficulties, according to Nippon.com

Overall, the pandemic affected the unemployment rate in Japan to a much smaller extent due to both Japan’s unique social background and the governmental effort. This rate is still steadily declining.

– Ella Li
Photo: Flickr

How Japan Became Impoverished
As the world’s third-largest economy, many have long viewed Japan as an economic and global powerhouse. However, Japan has faced an increasing poverty level for the better part of the last two decades. According to the latest study by the Organization for Economic Co-operation and Development (OECD), Japan’s poverty rate currently stands at 15.7%. Here is some information about how Japan become impoverished.

Japan’s Lifetime Employment System

The determining factor of income distribution has long been Japan’s lifetime employment system. This system has been around for decades; Japan implemented it during the large growth periods the country experienced during the 1950s and 1960s. Established companies for regular or seishain employees mostly practice the lifetime employment system. The system’s focus is on three primary pillars. The pillars include an “implicit guarantee” to take care of regular employees until retirement, wages that seniority dictates and company-based labor unions for regular employees.

However, 37% of the country’s labor force are nonregular employees and the employees have revolted against this system in recent years. Non-regular employees receive less pay and do not receive the same level of benefits that their regularly employed colleagues receive. Another key aspect of this argument is that increased flexibility to hire and fire employees will increase economic efficiency.

The Outlook and Shift of Japan’s Lifetime Employment System

The fact that numerous companies have converted regular workers to non-regular, part-time employment has also affected the outlook of the lifetime employment system. At the same time, a large portion of available jobs remains non-regular. Within the last few decades, companies that routinely hired 20 to 30-lifetime employees a year, now only hire two or three new employees each year. This new process has contributed significantly to how Japan became impoverished.

One can largely attribute this shift to two major occurrences. The first occurrence involves emerging-market economies such as China, where labor costs are lower. The second is the increase in part-time workers, especially women who need work and may not be able to commit full-time due to childcare duties and seniors who aren’t able to enjoy retirement due to their pension benefits not covering living expenses.

The Lack of Bankruptcy Procedures in Japan

Oxford Head of Japanese Economics, Shigeto Nagai stated how Japan also lacks Chapter 11 or a similar bankruptcy procedure that could possibly give those who fail another chance. This leads to an overwhelming fear in citizens of Japan, which prevents the citizens from seeking change due to the absence of the program. The addition of this program could significantly help those in need and eliminate the underlying fear that exists.

Although no current implications are in place, certain companies are taking action into their own hands to possibly eradicate the issue. A number of companies have started adopting a variety of incentive plans including performance bonuses, share options, profit-sharing schemes and employee stock ownership plans. While this is not the end-all-be-all solution, it is a start toward reaching the proper employee benefit programs that are at the center of the cause of how Japan became impoverished.

Similar factors and the revolution of such a large part of the labor force against Japan’s long-established system have led to the disappearance of the middle class. Nagai also stated that “Income has declined across the income percentiles, and the share of low-income households has risen as those of middle- and high-income groups shrink.” The Economics Head further stated his concerns, stating that Japan’s middle class is gradually disappearing.

Nagai feels that the only way to save the Japanese economy is to create a more dynamic human resource allocation. The static allocation of human resources has greatly affected how Japan has become impoverished and the country’s best efforts to eliminate the deflationary equilibrium or the lifetime labor force.

Looking Ahead

Despite recent trends, there are a lot of changes underway to relieve Japan of its impoverished struggle. Labor shortages have led to employers raising salaries, which has attracted many younger, potential employees. Numerous Chinese startup companies have created employment opportunities which a substantial amount of young talent and many regular employees of larger corporations are quitting jobs early in their careers to seek opportunities elsewhere.

With the recent developments, the nation of Japan is closer to being the economic powerhouse that it has historically been for decades and its citizens once again have a fair chance at earning a living.

Austin Hughes
Photo: Flickr