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A Look at Poverty in Japan (Before Pandemic)

  Japan has often been regarded as a country that has equal opportunities for all. However, it seems as if poverty and wealth inequality in Japan had been steadily getting worse for the past two decades. According to data from the OECD & World Bank, the rate for relative poverty in Japan is 15.7% (higher than OECD Avg. of 11.7%). It also shows that Japan's middle class is slowly becoming smaller while the share of low-income households rises (Huang, Eustance). Could age be a factor in this issue? It is a known fact that Japan's demographics show a largely aging population with the percentage of those aged 65 and older increasing while the percentage of the population below 65 declines. Many Japanese companies emphasize company loyalty and taking care of older workers who tend to earn higher salaries as they gain more seniority, but compared to other countries, Japan doesn't have "executive pay" that creates a wage gap between employees and executives (Huang, Eustance). Japan also has a higher corporate tax rate than many other countries. All of this could explain why their top income tier hasn't grown that much but still makes up a significant portion of income distribution in Japan. 






Although the share of wealth among the lower quintiles seems to rise between 2008 and 2013, there is a lot of evidence that the poor are getting poorer. Among the age demographics, Japan is specifically seeing a concerning rise in child poverty at 16% (Komamura, Kohei). 

Although Japan has one of the biggest economies in the world, they have been dealing with many economic issues since the real estate bubble and the lost decade (1990
s). They have attempted to fix many of these issues recently by changing things such as implementing free tutors for school-children, deregulating laws about importing foreign labor, trying to increase women in the workforce, and providing better social services and parental leave. However, none of these things have seemed to really make a significant difference in reducing poverty. Japan’s issue with poverty is a complex one that needs to consider things such as the effects of Prime Minister Abe’s Financial & Economic plans, age demographics, structure and ethics of businesses, and international competition such as with China.




Works Cited:
Huang, Eustance. “Japan's Middle Class Is 'Disappearing' as Poverty Rises, Warns Economist.” CNBC,
        CNBC, 29 Sept. 2020, www.cnbc.com/2020/07/03/japans-middle-class-is-disappearing-as-                     poverty-rises-warns-economist.html. 

Komamura, Kohei. “Wrestling with Poverty and Income Inequality.” Nippon.com, 30 Apr. 2015, www.nippon.com/en/in-depth/a04201/?pnum=2.


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