On the surface, Japan seems to successfully avoid the hardships and setbacks that can plague powerful economies. However, Japan actually employs costly efforts to hide its growing economic struggles. Here’s what you should know about poverty in Japan.
10 Facts About Poverty in Japan
- Less than one percent of Japan is homeless. As of 2018, Japan has a population of 126.5 million people. According to the latest Ministry of Health, Labor, and Welfare statistics, Japan’s current homelessness figure stands below 5,000. This is a steady decline from nearly 26,000 people without homes in 2003. While this appears to be a remarkable feat of social reform, the truth is that the Japanese government commits millions of dollars every year to ensure homelessness remains low. The goal is to ensure that the Japanese economy appears strong. In reality, poverty in Japan is increasing. The dozens of government reforms Japan enacts each year are extremely costly and are approaching unsustainability.
- Japan is “the most equal major society” in terms of wealth distribution. According to the Statista Research Department, a total of 92% of the Japanese population has anywhere from $10,000 to $1 million in either assets or wealth. On paper, these figures appear to demonstrate an extremely healthy economy; however, they hide the fact that poverty in Japan is well over 16%. The notion that 92% of Japanese citizens fall into some category of “wealthy” may be misleading, serving as a straw-man statistic booster.
- A rising percentage of individuals in Japan are poverty-stricken. Japan has seen a huge and sudden rise in poverty and poor economic conditions, especially since 2012. According to The Guardian, 3.5 million Japanese children live in poverty-stricken homes. Since 1991, poverty has increased as a systemic problem for Japan, reaching 16.3% this past year. This figure is expected to continue to rise dramatically as the working population decreases.
- Japan is caught in an economic game of “cat and mouse.” Ever since Japan experienced a major increase in retired citizens, poverty in Japan has become a greater issue. As a result, Japan has had to increase the retirement age to 70, shift focus to labor force participation (which breeds unequal disbursement of employment opportunity), and implement expensive government reforms to cope with the declining workforce population and the increasing retired population.
- Japan pours a ton of resources into battling unemployment. Poverty in Japan entered an unprecedented era of severity after a major drop in workforce members in 1991. Before 1991, unemployment hovered just below 2% for decades, then rose drastically to nearly 6% by 2002. In fact, this singular event nearly toppled Japan as a world economic leader. Today, Japan has returned to a nearly 2% unemployment rate, although the country has had to pour a huge amount of financial resources in order to accomplish this stabilization. The country still has not fully recovered.
- One-third of Japan is retired, and the government doesn’t know what to do. Currently, around a third of Japan’s population is 65 or over. Japan actually has the oldest population in the world. This is partly why Japan has become one of the slowest growing major economies. Aggressive government spending is needed to care for a huge portion of Japan’s population, and the problem is only getting worse as the population continues to age.
- Japan suffers from an imbalanced ratio of employed citizens and recipients of social benefits. Much like the United States, Japan’s social benefits system is increasingly problematic. Japan’s “Baby Boom” generation nearly all receive social security. Meanwhile, the section of the economy that pays for social security benefits is not keeping up with financial demands. Japan’s birth rate is likewise falling behind the number of new social benefit recipients. In fact, Japan is expecting to see an unsustainable ratio of ‘recipient to payer’ in social benefit programs by 2025.
- Japanese single mothers carry disproportionately heavy financial burdens. In Japanese culture, if a divorce occurs, the mother receives full child custody in nearly 80% of divorce cases. Right now, there is no enforcement of child support programs — meaning that single mothers in Japan may take on 100% of the financial burden of raising children. As a result, thousands of single mothers are left in poor economic standing and are forced to seek government assistance. Because the subject of single motherhood due to divorce is taboo, thousands of women live without assistance. This leaves many of them in extreme poverty.
- Abandoned houses have become a common phenomenon. “Akiya” is a term to define a house that has been vacated or abandoned and remains empty. According to World Habitat, there are currently around 9 million abandoned homes in Japan, with an expected increase of up to 21 million abandoned homes by 2033. This adversely affects poverty in Japan because the government is forced to repurpose and upkeep vacant houses; this is an enormous financial burden.
- Japanese poverty affects women differently than men. Japan has made some remarkable advancements towards equality in the workforce in recent years. 71% of women are employed, versus the 58% female employment rate a decade ago. Women in Japan also enjoy long and generous parental leaves. However, despite these progressive advances, the female workforce is facing an uncertain future, with prospective poverty rates for older women expected to reach 25% by 2040. With rapidly declining birthrates and increasing retirement rates, current female employment levels won’t be able to combat another wave of retirement recipients and the social benefit impacts.
Why This Knowledge is Important
The Japanese economy is the third-largest in the world, and Japan is regarded a global example of economic strength and prosperity. However, the hard reality is that Japan is a struggling country that is finding it harder to support its citizens every year. Without aid, Japan may find itself unable to provide and maintain its population without making drastic sacrifices — which would not only decrease the strength of Japan but also impact the wider global economy.
– Donovan McDonald