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Examining Japan’s Middle Class

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

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Poverty Reduction: Farming Innovations in Japan

Farming Innovations in JapanAgri-tech, a growing term used to describe Japan’s digital farming technology has greatly advanced farming systems in the country in order to combat a potential water shortage by 2030. Both experienced and inexperienced farmers in Japan are using new technologies to limit the overuse of water and fertilizer, which in turn, is fighting food insecurity and poverty for the entire population. Professor Kiyoshi Ozawa, from Meiji University Kurokawa Field Science Center, summarizes the system, “instead of spraying a large amount of water with sprinklers or the like, fertigation uses narrow pipes to place drops of water and fertilizer at the roots of the growing crops.” Farming innovations in Japan aim to reduce overall poverty in the country.

Farming Innovations in Japan

There are several innovations to take note of that have eased the labor intensity and climate impact of farming in Japan, such as heat-resistant varieties, delayed transplanting and specialized application of fertilizers, to combat both climate change and poverty in the face of a potentially grave water and food shortages.

Japan Today, an esteemed magazine based in Japan, also highlights the main goal of this growing agri-tech business as a collaboration between experts, advanced farmers and younger generations to create permanent, sustainable solutions and share knowledge about the most efficient farming techniques. “The valuable experience and techniques of veteran farmers could also be more accessible to newer farmers via the web,” explains writer Allen Croft, “such as learning resources about harvesting times with databases and photos.”

Factors Affecting Farming in Japan

Not only do these farming innovations in Japan help to alleviate poverty in vulnerable communities but they also fight climate change issues by directly limiting water and fertilizer usage and combatting overproduction. Climate change has caused tension in the agricultural world of Japan, as unpredictable water levels cause heightened food prices, specifically in terms of rice production. Several other factors are contributing to pressure on Japan’s farming industry, including a decline in labor force participation as fewer young people are becoming farmers as well as Japan’s reliance on food imports.

These new technological farming innovations in Japan are working to alleviate the problems outlined above and are bringing new uses to AI and loT technology in a way the farming communities have never seen before. Through data analysis and observation of traditional farming structures, farmers can maintain exact water measurements and maximize soil fertility in order to maintain consistent crop growth. The main goal of these digital solutions to farming in Japan is to create permanently sustainable agricultural practices for generations to come.

The Japan Social Development Fund

Specifically from the standpoint of poverty alleviation, the World Bank has implemented a project, the Japan Social Development Fund, that aids impoverished communities while focusing on education, adaptation to climate change, health and sanitation services as well as environmentally sustainable agricultural practices. While most vulnerable communities in Japan do not have access to the digital technology innovations that farmers have developed, a social shift towards awareness of water usage has allowed farmers with limited resources to implement certain practices.

The Future of Digital Agriculture

There are a variety of growing measures set in place to make the agriculture business in Japan more sustainable in the face of both climate change and poverty. Digital agriculture is growing at an immense rate and it is predicted that the global market, specifically for agricultural robots, will reach $73.9 billion by 2024, which will vastly change the structure of food production and the labor force. The scope of digital farming innovations in Japan is broad and could potentially create a basis for agriculture in other countries struggling with water and food shortages as well.

– Caroline Pierce
Photo: Flickr