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Inequality and Precarity in Japan: The Sorry Achievements of Abenomics
Published online by Cambridge University Press: 14 March 2025
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Japan was known as the home of a strong middle-class in the affluent 1980s, the fruits of its prosperous economy distributed more equitably than in many comparable high-income countries. Yet strictly speaking, contrary to popular perception, Japan was not that “egalitarian.” However, public credence was set and the Wall Street Journal (1989) to tellingly (if hyperbolically) characterize this secure society with impressive equality and principled values as “the only communist nation that works.” Then, sea changes followed. This once “egalitarian” society is now widely (not least in Japan) recognized as a kakusa shakai (unequal society) in which income and wealth have become more unequally distributed than in many advanced economies. While widening wealth gap between rich and poor is a global trend as shown in the graph by Thomas Piketty and his co-researchers (Figure 1.1), in the case of Japan, in recent decades this has been accompanied by economic stagnation, rising levels of poverty, precarity, and public debt grafted on top of population aging. Against these backdrops, the second Abe Shinzō government started its economic policies, proclaimed as Abenomics, in an effort “to sustainably revive the Japanese economy” that was promised to trickle-down to all. Five years on, evaluations have taken place on the Abe program centered on hyper monetary easing, fiscal stimuli, and structural reform.
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References
Notes
1 The Wall Street Journal, January 30, 1989, p. 1.
2 The Gini coefficient is the most widely used measure of a nation's rich-poor gap, measured from 0 to 1, with a higher number implying greater inequality. The Ministry of Health, Labour and Welfare updates once every three years the Gini coefficient before and after income redistribution (e.g. tax). As of most recent reporting date, the level of inequality was 0.570 in 2014 before income redistribution, compared to 0.554 in 2011 and 0.349 in 1981. Meanwhile, the post-redistribution level of inequality was 0.376 in 2014, compared to 0.379 in 2011. See here. According to the OECD report, Japan's Gini was 0.33 in 2015, more unequal than the OECD average 0.318 in 2014 and 0.315 in 2010. See here.
3 See here (p. 6); Schoppa, Leonard J. 2006. Race for the Exits. Ithaca: Cornell University Press.; Standing, Guy. 2011. The Precariat. London: Bloomsbury Methuen Drama.; Osawa, Mari. 2011. Social Security in Contemporary Japan. London: Routledge/University of Tokyo Series.; Allison, Anne. 2013. Precarious Japan. Durham: Duke University Press.; Baldwin, Frank, and Anne Allison, eds. 2015. Japan: The Precarious Future. New York.: NYU Press; and Tachibanaki, Toshiaki. 2015. Hinkon taikoku Nippon no kadai. Kyoto: Jimbun Shoin.
4 The website of the Prime Minister of Japan and His Cabinet, p.1.
5 Ibid.
6 See here.
7 See here.
8 See here.
9 In the Cabinet Report, there is some discrepancy between the documented numbers in the text and the ones in the graphs, and the years are not specified. The website of the Prime Minister of Japan and His Cabinet, p. 1-2.
10 In December 2016, the Cabinet Office adopted a new method to measure GDP in line with the international calculation standard called 2008 SNA, thereby incorporating the components such as research and development (R&D) in capital expenditure. The data were then revised, with the benchmark year changed from 2005 to 2011, and the revisions were made dating back to 1994. Employment and labor attorney Akashi Junpei has raised concerns about data accuracy (i.e. the fabrications and falsifications of official figures), since the new method, including unspecified components such as “etc.,” has greatly pushed up the value of nominal GDP during the Abenomics years. For more details, see Akashi, Junpei. 2017. Abenomics ni yoroshiku. Tokyo: Shūeisha.
11 For example, see here.
12 See here.
13 See here.
14 There is no official poverty line, but the government uses its own appraisal method to report relative poverty.
15 When the data are presented as an index using the reference year 2000 = 100, the figures in 2015 are as follows: 165 in Canada, 151 in the UK, 137 in France, 134 in the USA, 128 in Italy, 125 in Germany, and 84 in Japan. See here.
16 See here.
17 See here.
18 The website of the Prime Minister of Japan and His Cabinet, pp. 1-2.
19 See here, p. 2.
20 See Mizuno, Kazuo here.
21 Ibid.
22 See here, p. 45.
23 See here.
24 The 2016 report by Nomura Research Institute
25 See here.
26 Note PM Abe's remarks in December 2013: I believe Abenomics is a failure if the fruits of economic recovery led by large corporations do not reach small and medium-sized enterprises and their employees.
27 The website of the Prime Minister of Japan and His Cabinet, p.1.
28 Note that there is no official definition of “regular”/“irregular” workers. It can be said that the “irregular” workers are those who are not “regular” workers. In general, the “irregular” workers are referred to as those workers such as part-timers, temporary (dispatched) workers, on fixed-term contracts with little financial security. See Genda, Yūji.
29 See here.
30 Osawa, Mari.
31 Standing, Guy.
32 Yamamoto, Taro, member of the House of Councilors, at the Cabinet Committee on December 7, 2017. (See here.)
33 See here. See Ueno, Chizuko.
34 See here and here.
35 The website of the Prime Minister of Japan and His Cabinet, p.1.
36 See here.
37 See here and here. Also, there are kanpukin (refunds/rebates) as well as tax havens. Kanpukin is the system in which the rebate (refund) of the consumption tax is transferred from the tax office to large export corporations. As the tax rate rises, the refund amount increases accordingly. A retired professor at Shizuoka University estimates that the refund to the top 10 large export companies amounted to ¥783.7 billion in 2015. Since the consumption tax rate increased to 8%, the refund dramatically increased by 1.8 times. The largest refunds went to Toyota, Nissan, and Honda. For details, see here. For tax havens, see here.
38 The OECD analysis for 2009 shows that each country reduced the poverty rate by 20 to 80% after redistribution, with the exception of Japan. The country's poverty rate increased by 8% in dual-income households and single-parent households in post-distribution. See Osawa, Mari, Taro Miyamoto, and Shogo Takegawa. 2018. “Honraino zensedaigata shakaihoshou toha nanika.” Sekai 2:68-81.; Osawa, Mari.
39 See here.
40 Uekusa, Kazuhide.
41 Osawa, Mari, Taro Miyamoto, and Shogo Takegawa. 2018. “Honraino zensedaigata shakaihoshou toha nanika.” Sekai 2:68-69.
42 See here.
43 Note the figures do not factor in the population excluded from the statistics, e.g. homeless, victims of karoshi.
44 See here.
45 See here.
46 See, for example, Akashi, Junpei. 2017.
47 Uekusa, Kazuhide.
48 Kasai Akira's assessment from Nichiyō tōron (NHK) on February 25, 2018.
49 See here.
50 Note that their report is open source and reproducible: See here.