April 22, 2010

This past fall, the government of Japan announced for the first time an official poverty line. Following an internationally recognized formula, the government set the poverty line at about $22,000 a year for a family of four (that's half of Japan's median household income). The Labor Ministry disclosed that almost one in six Japanese, or 20 million people, lived in poverty in 2007. In addition, statistics showed that one in seven children live in poverty. As a result, the government has pledged to offer monthly payments of $270 per child and to cut the cost of high school education. Researchers estimate that the poverty rate in Japan doubled since the country's real estate and stock markets collapsed in the early 1990s. This led to two decades of income stagnation and economic decline.

These new statistics on poverty stunned the nation. Many Japanese believe in the popular myth that their country is uniformly middle class. "After years of economic stagnation and widening income disparities, this once proudly egalitarian nation is belatedly waking up to the fact that it has a large and growing number of poor people." Many Japanese were shocked to learn their country has a poverty rate of 15.7%, which is close to the Organization for Economic Cooperation and Development's figure of 17.1% for the United States. Japanese have often felt that the United States' social inequalities were too high, and have viewed the problem in the U.S. with "scorn and pity". Thus, many Japanese were astounded that they have a similar rate.

The government of Japan also revealed that it had been secretly keeping poverty statistics since 1998 and that they knew about the poverty problem, but were hiding it. This about-face in terms of being open about poverty statistics is a result of the new left-leaning government led by Prime Minister Yukio Hatoyama. Last summer his party replaced the Liberal Democratic Party, which was in power for five decades. Hatoyama campaigned on the pledge that he would force Japan's notoriously secretive bureaucrats to be more open, especially about social problems.

Poverty experts say that more than 80% of those living in poverty in Japan are part of the "working poor". These people hold jobs (often more than one), but these jobs are often low-wage or temporary and they often have no security and few benefits. Economists say that there has been an increase in these low-paying jobs in Japan because of years of deregulation of the labor market and competition with low-wage China. Making matters worse, these jobs are largely uncovered by the social safety net -- which is incredibly outdated considering it was created decades ago when most men could expect secure, lifetime jobs. Thus, when economic problems hit Japan in the early 1990s and "lifetime" jobs were being cut -- and there was an insufficient social safety net -- millions of Japanese fell under the poverty line.

These "working poor" people usually have enough money to eat, but not to take part in often-taken-for-granted social activities like eating out with friends or going to a movie. A social welfare professor at a university in Tokyo said, "Poverty in a prosperous society usually does not mean living in rags on a dirt floor. These are people with cellphones and cars, but they are cut off from the rest of society." In addition, social workers fear that the poor will not be able to pay for the best schools and other expenses that enable their children to compete in Japan's highly-competitive, high-pressure education system. And by not being able to attend the best schools in Japan, there's a fear that the children could continue in the cycle of low-wage work. A board member of a non-profit that helps poor children and orphans said, "We are at risk of creating a chronic underclass."

The article also mentioned how poverty is culturally addressed in Japan. The article featured the story of Ms. Sato, a 51-year-old widow who is raising a teenage daughter on less than $17,000 a year. She works two jobs. She cannot afford to see a doctor or buy medicine to help her growing number of physical ailments. In order to afford the school uniforms her daughter needed for school, Ms. Sato cut back to two meals a day. Her daughter wants to attend vocational school, but Ms. Sato cannot afford the $10,000 annual tuition. When the government recently announced the poverty line, Ms. Sato discovered that she fell below it. However, she said, "I don't want to use the word poverty, but I'm definitely poor. Poverty is still a very unfamiliar word in Japan."

Social workers in Japan are glad that the government's announcement helped to expose the problem of poverty, because they say the problem is often overlooked in Japan, which has a relatively homogeneous population. Experts and social workers say that Japan does not have the high crime rates, urban decay, or stark racial divisions that the U.S. has. They say that Japan's poor can be deceptively hard to spot because people try so hard to keep up the appearance of being middle class. Few Japanese are willing to admit they're struggling financially for fear of being stigmatized. Ms. Sato said that her and her daughter hide their financial woes and outwardly smile, but then "cry on the inside" when friends and relatives talk about vacations -- a luxury Ms. Sato cannot afford. She said, "Saying we're poor would draw attention, so I'd rather hide it." Yet, at the same time, she said her biggest challenge was having no one to talk to. She said she's sure that many other families are in a similar situation as her, but they refuse to admit it (which is exactly what she is doing). (Full Story)

Japan is not the only country that needs to have a better, more open dialogue about poverty and the working poor. Japan is not the only country that needs to remove the social stigma of poverty. Japan is not the only country that needs to improve, not cut, their social safety net -- especially in times of economic crisis, when people are the most vulnerable. Sadly, Japan is just one of many.