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Welfare payments to be slashed ¥74 billion to root out the comfortably poor

Kyodo

Welfare benefits will be slashed by ¥74 billion over a three-year period starting from fiscal 2013, after a government panel found that some people are making more on the dole than the average low-income person who is not spends on living costs, it was learned Sunday.

The decision to lower standard benefit payments by 6.5 percent was made by welfare minister Norihisa Tamura and Finance Minister Taro Aso. The reduction will hit in August.

Since the standard benefit payment provides the basis for determining other levels of public assistance, such as subsidies for school expenses, reducing it may also affect low-income earners even if they are not on welfare.

Tamura said after the meeting that he will implement the measures so the decision does not adversely affect such earners.

The actual amount doled out per household will be slashed by a maximum of 10 percent from the current level, which is based on age, number of family members and area of residence.

Welfare recipients hit a record high of 2.14 million in October 2012 and the state budget for benefits, including medical assistance, stood at around ¥2.8 trillion for fiscal 2012 ending in March.

Later Sunday, the government and ruling parties approved the fiscal 2013 budget proposal, with expenditures in the general account budget totaling ¥92.61 trillion. The Cabinet will sign off on the budget on Tuesday and send it to the Diet.

At the approval meeting, Prime Minister Shinzo Abe called for the swift enactment of the budget because it “will enable us to implement economic measures in a seamless manner and tackle major challenges, such as reconstruction (from the 2011 quake and tsunami) and disaster prevention.”

  • fun_on_tv

    Why doesn’t the government increase the minimum wage instead?

    • http://www.facebook.com/joey.gerdin Joey Gerdin

      Reza, clearly you do not own a business What right should any government have to tell a business what to pay their employees. But the bigger question is why has the government taken from hard working people in the first place and given to people who don’t want to work?

      • http://pulse.yahoo.com/_WGK3IDC46CWEEFW4VEHQWA5DXA William

        I think Reza was being sarcastic.

    • Calumon

      Because the government doesn’t want higher unemployment, and increased living costs for pensioners & the unemployed.

    • Robert Chapman

      Mr. Rahman, I am sure you already know this, but raising the minimum wage will surely help low-wage earners, but it will also hurt the person who pays those low wages. As far as I know, this person, who pays those wages, is in business to make money for himself, as well as save money for his customers, wherever possible. He or she is NOT in the business of providing jobs for people unless they want one based on what he or she is willing to pay for their services. You see, Mr. Rahman, the reality is we live in a “take it or leave it” world whether you like it or not. We don’t live in Utopia just yet!

    • http://www.facebook.com/mickel.knight.9 Mickel Knight

      Because you cannot pay someone more than the value they bring to the business. Who would pay someone $12/hr when their work brings the company $10/hr? What would you do if your grocery store began paying baggers $20/hr, and then as a result had to raise the price of milk by 50%? Many businesses operate on low profit margins. Any increase in minimum wage results in (1) fewer minimum wage jobs, and (2) higher prices – both of which hurt the poor. The best recourse for the working poor is to gain marketable skills, and be a good worker. Someone who does those two things will wander into the middle class pretty soon.

    • SuzyQue

      Because it doesn’t work? It creates an inflationary response, and makes it more difficult for entry level workers to become employed.

    • GoldenRudy

      Exactly! Right on! The min wage should be $67.50 per hour. That way we will all be “comfortable”. Ya, the min wage. That is the ticket to economic success and growth. But where?

      • danstlmo

        and while we are at just outlaw poverty.

    • Walldog

      Reza, lets say that the government raises the Minimum Wage. Putting things in the simplest of terms, where does the money to do so come from? Businesses would have to raise the cost of goods to compensate for paying the higher wage. Those who are already making more than minimum wage tend to want to see their wages go up, too. This means higher prices for everyone. Higher prices would then consume the Minimum Wage. You’ve also made the cost of labor go up. Higher labor costs makes it more difficult for businesses to hire anyone. So, what have you accomplished?

    • Doug Lynn

      Replace the FICA tax with a Fair Tax like sales tax. Lower the cost of labor and shift taxes away from work and toward consumption. FICA taxes are the most regressive tax we have.

      Raising the minimum wage will help a few million people and eliminate the jobs of a few million people. The trade-off is horrible.

  • http://www.facebook.com/profile.php?id=100004421197233 Tatsushige Shigure

    Great better to make more people poor and living under the poverty line, then increase the minimum wage .(Dumb and Dumber springs to mind) … No matter what country the people in power always line their own pockets and screw over the people that are paying the bastards! No wonder Japan refuses to let the people have guns, half the criminals in power would be wearing wooden suits!

    • Robert Chapman

      Wow, I get to read something stupid from an assumed “taker”. Please read my earlier reply to Mr. Reza Rahman, above, regarding a very basic element of economics. Perhaps you need to go back to school and finish reading on this issue. I grant there are a lot of powerful sleazebags who hoard their money at your expense but overall capitalism wouldn’t work unless some hard realities are realized. Just paying more and more in minimum wage won’t solve a thing. Do me a favor, imagine you own a business and you pay a “living wage” of, say. $10/hr. Suddenly, you employees demand $15/hr. What do you do? Pay it and suffer a loss in profit? Probably not. You will first raise your prices on your merchandise and more than likely drive away customers. Eventually, because you have to pay $15/hr instead of $10/hr, you will lay off as many as you need to in order to at least break even. Honestly, now, who wins? No one!

    • sailordude

      They have lots of guns in Japan, just because they are illegal doesn’t mean there are no guns.

    • Stan_LS

      “screw over the people that are paying the bastards!” – that doesn’t compute. People who are paying others are the employers.

    • Walldog

      Your understanding of basic economics is lacking. Where does the money to increase come from? Think about it.

      • zagnut64

        His basic understanding of composition is also lacking.

    • Saverio

      Shigure-san,

      It would be worth your while to open a book on economics and perhaps one on math before making such statements.

      So, the government raises the minimum wage. This wage cost increase naturally increases the employment costs of all businesses. The business then make rational decisions to adjust hours worked, raise prices or mechanize processes.

      If a firm cannot raise prices and is in a human resource intense business, they lose competitiveness domestically to larger players and either shut down or move their business outside Japan.

      Across the board, prices rise which puts more pressure on the retired elderly and the unemployable. I could go on, but you either get the point or don’t have the education to understand the rest anyway.

      So your recommendation, though superficially appearing to be a compassionate act and seemingly an easy answer, is particularly harsh on the very people you think you are helping and, in economic terms, is the “Dumbest” (using your terminology above) of the choices at hand. But, it appears your ilk likes easy choices as long as you don’t have to deal with the consequences at the moment you make them.

      After all, you are spending someone else’s money (you do realize that the “government’s” money comes from the people don’t you?).

      Time to grow up,

      Saverio

      PS, Japan has a 220% debt to GDP ratio. This debt to GDP ratio is one of the reasons the country is incapable of competing anymore. It is all the debt your parents rang up when times were good. Well, the payment is due and it is your responsibility.

  • Don Surber

    This beats the alternative of raising minimum wage, which would simply invite inflation, which would hurt everyone.

  • http://pulse.yahoo.com/_WGK3IDC46CWEEFW4VEHQWA5DXA William

    In the US the desire of Obama is to increase the number of comfortably poor. No matter that, like Japan, the US is bankrupt, too.

    • hun555

      have you tried to be COMFORATABLY poor?

  • disqus_k6UuKD7JaJ

    Japan has a labor SHORTAGE problem. There are people collecting welfare benefits that are able to work. By cutting the welfare benefits you encourage people to re-enter the workforce. Hopefully thses people will start to climb the ladder again and work their way out of poverty. Welfare keeps people poor…..

  • Richard Good

    It is refreshing to see one government take a stand. America still is using the welfare system to enslave the poor. Then their continued support s required in order to continue to receiving welfare. They will never improve their lives from what they are today.

    • Pendog

      “Enslave” is old and busted, ‘reward’ is new and shiny! Welfare, disability and unemployment are ‘stimulating’ our robust recovery, according to this administration anyway.

    • DiggFerkel

      Give us your welfare and we’ll give you our vote. An obvious conflict of interest.

    • Mike

      They are using the welfare system to get on top right now, when they have all the votes they need and they have all the people they want in office they will slash it as well. Then the real trouble begins. What is happening now is only the beginning.

    • http://www.facebook.com/people/Topsy-Krets/100000145762269 Topsy Krets

      I couldn’t agree more!! Can you imagine the outrage if this happened here?

    • EdG1955

      Most of the Americans on welfare are white. Most of them voted for Romney. Those dang Republicans are keeping white Americans enslaved. We must fix this travesty.

  • TruthDetector

    The Global Obama Depression comes to roost in Japan.

  • Spartacus

    Yes, raise the minimum wage. Everyone knows businesses always absorb the additional labor cost when the minimum wage is increased!

    • http://www.facebook.com/george.reagan.509 George Reagan

      No. They don’t absorb it. They pass it on to the customer. Watch everything cost more after a wage hike. Ignorance is what’s killing this country!

      • uisignorant

        I am pretty sure that was sarcasm.

  • GoldenRudy

    “comfortably poor” … very nice use of words. It is a generational thing in America and it has or is killing the major cities. “comfortably poor” … nails it!

  • dixiedog

    No matter where in the world you live the message to the poor is the same. Get a job!!! Any job!!!

  • sailordude

    A racially homogeneous country like Japan can do this. You try this in America and the cities will burn a bright red. But we will come to this point once the Democrats have one party rule.

  • Ram Rom

    Why can’t the USA do something like this to get the life long welfare leeches off the public hand out? And don’t say raise minimum wages. Stupid! That would increase the cast of everything. Did you hear me? I said EVERYTHING you want to buy would go UP! Stupid people everywhere.

  • Juan Outtamany

    once the shame is removed from poverty people no long see the need to change

    • EdG1955

      Shame in poverty? How 18th century of you.

  • 2ndprotectsall

    The U.S. should do the same thing, the $$$ saved could then be pished away by the dems on something else.

  • Yuriko

    Jobs are going away in Japan. The closing down of the atomic plants with the strong yen have made Japan’s cost too high. Japans corps are “relocating” plants to China and Southwest Asia. There are no new jobs available. Like in the USA where 3.5 million jobs are poof gone forever. The service sector is shrinking in both countries. When you bank online, buy from an online store, pay your bills online, you are helping make someone unemployed.

    • GHZSD

      I have to confess having worked 12 years writing software I most likely deserve “off-shoring” since I am sure my efforts have resulted in “efficiency gains” and hence more unemployed.

      HOWEVER… The fact of automation is not going away. Production robots capable of doing a wide range of tasks and banging out virtually problem free parts etc are not only here to stay, but they are getting cheaper and smarter.

      I reckon in 20 years grocery stores, banks etc will be devoid of checkers and tellers. Manufacturing (if done in the US) is largely automated.

      OK to the point… I detest socialism … it does not work!!! Now what do we do with all the unnecessary people?

  • Jack Parker

    Cut off their welfare and, since they have all senses of self reliance and personal responsibility, they will soon become uncomfortably poor and right back on the dole.

  • cntrlfrk


    The only thing that can fix this is higher taxes and more government. :o/

    .

  • StevenNewsom

    Wellfare should not be comfortable anything.It needs be be a subsistence level survival, and only long enough to get better at what you do or learn something else.

  • John

    Where is the shame of major corporations getting government subsidies? Are these companies too lazy to make their own money?

  • MountainHome

    Congress has it’s “War on Poverty” program going since the ’60s. Their only solution was to just pay off the people to shut them up instead of trying to help them. Now, we are into the 5th generation of welfare families.

  • GIJ

    Wow, this comments thread is a veritable trollfest for the Atlast Shrugged fan club. Uh, welfare payments to poor people in America are pocket change compared to the massive subsidies and tax breaks given to big business as corporate welfare.

  • nauthizjane

    A courageous leader who uses common sense solutions to fix the mess. Where are our courageous leaders with common sense?.