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What You Should Know About Poverty in Japan

Japan, one of the largest economies in the world, has orderly slum-free neighborhoods, excellent infrastructure, and a low unemployment rate. Nevertheless, Japan’s economy is suffering and one serious issue it is struggling to address is poverty. The following are some stats to give you a sense of what poverty in Japan looks like today:

  • In 2014, the relative poverty rate (i.e., the percentage of the population living on less than half of the national median income) was 16%. This is the highest rate on record in Japan.
  • In terms of Organisation for Economic Co-operation and Development (OECD) rankings for poverty, Japan is the sixth worst among the 34 countries.
  • One in six Japanese children live in poverty.
  • The poverty rate for Japanese children living in single parent homes is 54.6%. This is the worst in the OECD.
  • More than 500,000 single mothers live below the poverty line, earning less than $12,000 a year and 80% of single mothers do not receive child support.
  • Although poverty rates have hit a record high in Japan, the unemployment rate is very low at 3.6%.
  • Poverty seems to prevail even with a low unemployment rate because many people are working low-paying, part-time, or irregular jobs. Almost 40% of the Japanese workforce is working part-time jobs.
  • Surprisingly, in 2014 the number of homeless people in Tokyo hit a record low at 1,697. However, there are questions regarding how accurate this measure is.
  • Issues of poverty as they relate to young adults are somewhat invisible because many Japanese young adults rely on their parent’s generosity and live at home without having to pay rent.
  • Many Japanese parents have been experiencing economic hardships as they age because they have drained their retirement savings in order to support their adult children.

Thus far, Prime Minister Shinzo Abe has tried to implement his “Abenomics” policies to stimulate economic growth in Japan and as a result reduce poverty. Abenomics is based on three arrows that are focused on monetary policy, spending mainly targeted at infrastructure projects and stimulating private investment, and structural reforms. Despite these efforts, the benefits of Abenomics have yet to trickle down to the working class.

Most recently, Prime Minister Shinzo Abe unveiled a national campaign to reduce child poverty. He confirmed that he will set up a fund that is targeted towards children in poverty.  According to The Japan Times, one dimension of this plan has been to work with business leaders and other groups to establish a private fund aimed at  bolstering welfare payments. This campaign is a step in the right direction in terms of addressing child poverty. However, Prime Minister Shinzo Abe should also focus on implementing policies that directly address the issues of part-time workers and the working poor—the future of Japan’s economy depends on it.

 

Nisha Choksi and Rose Kim

 

 

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