Ever since the Japanese government started deregulating the economy in the ’90s, there has been talk of an emerging income gap (kakusa). To a country that likes to think of itself as being uniformly middle class, social stratification means trouble, since it is often related to increasing crime, alienation, and other social ills.
Japan has always had its share of rich people, but it wasn’t until the bubble era that they were visible. Before then, it was considered bad form to flaunt one’s money, but the new rich who emerged in the late 80s were happy to show off their big cars and fancy condos and gold knickknacks because it was believed that the rising tide was lifting all boats, as Reaganomics boosters liked to put it. Companies were doing great and since the lifetime employment system was still in place, the vast middle class wasn’t resentful. They believed their future was secure.
It wasn’t. The new rich received their comeuppance when the bubble burst and the middle class started worrying about jobs. The post-deregulation gap is different from the bubble-era gap because today’s new rich succeeded through ingenuity and ambition, rather than land and stock speculation. According to the free-market ideas inherent in deregulation, what made these entrepreneurs rich is the same thing that makes full-time company employees expendable.
An attempt was made to explore this conundrum last weekend on NHK’s new talk show, “Nihon no Kore Kara (Japan From Now),” which brings together a large number of people from all walks of life to discuss pressing social issues.
At one extreme of the income gap was Livedoor president Takafumi Horie, who, whether he likes it or not, is the poster boy for the new entrepreneurial spirit encouraged by deregulation. The studio was also occupied by a panel of pundits and several dozen people, ranging from young part-timers and college students to small business owners, housewives, and downsized salarymen. They discussed selected topics related to the income gap, and viewers at home (the show was broadcast live) could comment on these topics via the Internet. While the studio participants were split over the results of deregulation so far, a majority of viewers felt that it was inevitable and that one had to change with the times.
Everyone talked about his or her own situation, and while the pundits provided background where needed, each had an agenda as well. Horie, for example, didn’t quite buy the idea that poverty breeds poverty, despite overwhelming evidence provided by a scholar on the show; however, he boldly advocated a 100 percent inheritance tax. Provocative Keio University Professor Masaru Kaneko mentioned that corporations have taken unfair advantage of deregulation by cutting benefits and playing up employees’ fears. Masaaki Honma, an Osaka University professor who is also an adviser to the government, countered by saying that if Japanese companies really didn’t want to pay benefits then they would simply move their operations to China.
Kaneko wanted to keep the discussion centered on policy, but the show mostly dealt in attitudes. A long discussion of “freeters” — part-time workers who jump from job to job — had less to do with economic necessity than with the perceived lack of ambition on the part of young people. The loaded term “personal responsibility” (jiko sekinin) became a kind of mantra, and in the end the gap between well-off and not well-off had less to do with employment practices or structural imbalances and more to do with individual will.
No one, for example, mentioned “service zangyo,” a term that essentially means “free overtime,” and which has become an issue in recent years. Now that lifetime employment is history and companies are supposedly adopting a merit system to determine raises and promotions, employees say they are effectively being coerced into working overtime for free since they think it is the only way for them to earn raises and promotions that were previously based on seniority. An Internet search of “service zangyo” results in dozens of stories of court cases where major companies like Osaka Gas, Takefuji, Bic Camera, and Staff Service are being sued by the Labor Standards Bureau for not paying overtime.
Conversely, there’s “kara zangyo,” or “empty overtime,” meaning overtime that is compensated even if no work was done. Unlike service zangyo, the sin of kara zangyo is committed by employees, specifically civil servants who get paid for overtime more likely spent drinking in a bar than spent working at a desk. Right now the debt-ridden Osaka City government is the focus of widespread media attention for its systematic use of kara zangyo and other tax-wasting practices.
Public-sector waste is not a new thing, but given the nervousness of workers in the private sector one can imagine resentment toward civil servants running even higher than usual. Public service has always been the first choice of college graduates, not because they want to serve the public, but because employment is secure and promotion guaranteed. And as the kara zangyo phenomenon shows, the perks are unbeatable. Working for a big company used to be the next best thing, but without job security it becomes that much less desirable.
The real gap created by deregulation isn’t the one between rich and poor, which has always existed, but rather the one between people who work hard with no guarantee of security, and people who hardly work for incredible pay and benefits. It’s more like two separate cultures, which explains why the public sector was not represented at all on “Nihon no Kore Kara.” The gap is not an issue to them.