Perma-deficit, underclass in Japan’s future

When I came to Japan 35 years ago, this country seemed the most equitable and egalitarian place in the world. Unemployment was negligible, illiteracy was zero, everybody was entitled to health insurance, the gap between the rich and poor was not so big, and most people believed they were happy with their lives. The highest paid person in a company such as the president or chairman received no more than 10 to 12 times the salary of the lowest paid employee.

During the last two decades, Japanese employers have reshaped the working conditions by making every third employee “nonregular.” This includes contract, part-time, seasonal or workers on daily wages. These new workers do not receive the benefits to which most “regular” employees have been entitled.

According to data released recently by the Japanese Internal Affairs and Communications Ministry, the number of Japanese working on nonregular or part-time basis reached 38.2 percent of the workforce. Furthermore, the average annual wages of nonregular workers is only ¥1.6 million compared to ¥4.6 million earned by regular employees.

Twenty million irregular workers are being shortchanged annually. Their Japan is different from that of their parents. They postpone getting married, if at all, and are not having children. The estimated population of Japan will be 80 million — down from about 126 million now — by 2060. The social costs of this transformation will be immense. The simultaneous increase in the numbers of elderly means the revenue deficit will become a permanent feature of Japan’s economy.

None of Prime Minister Shinzo Abe’s “three arrows” is pointed at this regular/nonregular worker divide. How do you increase domestic consumption if you’ve created a class of workers, 20 million strong, without benefits, and who earn two-thirds less than the regulars?

satish tandon
yokohama

The opinions expressed in this letter to the editor are the writer’s own and do not necessarily reflect the policies of The Japan Times.