Tent village in Yoyogi Park in Tokyo, where many homeless people live in blue tents (The New Yorker).
According to numbers released by the Welfare Ministry Tuesday, Japan’s poverty rate hit a record high of 16.0 percent in 2009, up 0.3 percent from 2006. The increase in the number of people over 65 and the number of nonregular employees with less income was cited as the cause of the increase. Relative poverty was defined by the government as the number of people whose annual income is less than half the national disposable income.
The national disposable income in 2009 was 2.24 million yen ($28,000), meaning 16 percent of the Japanese population earns less than 1.12 million yen ($14,000) a year. Purchasing power in Japan is 25.43 percent lower than in the U.S., so in relative dollars, the relative poverty level is $10,493.80. The poverty level in the U.S., by comparison, is defined as a total income of $22,350 for a family of four. In 2009, 14.3 percent of Americans were living in poverty.
I think Japan’s numbers will get worse before they get better. The number of “freeters,” young people who don’t have steady employment, is expected to reach 10 million by 2014, up from 800,000 when the term was first used in 1987, and 2 million in 2002. The life-time employment practices that Japan was once famous for have all but disappeared, and there are fewer and fewer entry-level positions. This makes it harder for young people to afford homes or start families, which pushes down Japan’s birth rate even lower. Added to this is Japan’s seniors get the best social welfare benefits in the world. Given that the Japanese workforce is expected to shrink to 51.8 percent by 2050, this top-heavy welfare system will crush the economy and push many more into poverty unless Japan makes desperately needed economic reforms.
