During the period of high postwar economic growth, most people in Japan came to consider themselves part of a middle class.
With the burst of the economic bubble in the early 1990s and increasing globalization, however, that belief has been shaken as an increasing number of people sense Japanese society is becoming more two-tiered — and a handful of rich are being favored at the expense of everyone else.
Former Democratic Party of Japan leader Naoto Kan recently accused Prime Minister Junichiro Koizumi of accelerating the trend toward “liberalism for the strong,” which he said is turning more people into either “Horiemon (referring to the young Internet mogul Takafumi Horie) or homeless.”
Although that may be an exaggeration, the book “Kibo-Kakusa Shakai” (“Expectation-Gap Society”) has been a best-seller since its release in late 2004, as has “Karyu Shakai” (“Low-Class Society”) since its debut last year.
“That alone strongly indicates many people are becoming aware of the (polarization) trend and showing keen interest in it,” said Yoshio Higuchi, a professor of business and commerce at Keio University.
Higuchi was the editor of a book published in 2003 in collaboration with the Finance Ministry’s Policy Research Institute called “Nihon no Shotoku Kakusa to Shakai-Kaiso” (“Japan’s Income Disparities and Social Strata”).
That trend is seen in the rising number of “freeters,” young people who hop from one unskilled part-time job to the next, with little chance of building a career. And the nation’s Gini coefficient, which gauges income inequality, has also climbed in recent years.
The number of freeters aged 15 to 34 has surged from 1.83 million in 1990 to 4.17 million in 2001, according to the Cabinet Office’s White Paper on National Lifestyle issued in May 2003.
Meanwhile, the Gini coefficient rose to 0.3812 in 2002 from 0.3643 in 1990, after deducting taxes and social security premiums and benefits.
A higher number indicates greater inequality up to a theoretical maximum of 1.0, in which one person controls the entire wealth of a country.
According to the Luxembourg Income Study, a nonprofit research project involving 30 countries, the coefficient stood at 0.368 in the United States in 2000 and 0.345 in Britain in 1999. In 2000, it was 0.288 in France, and 0.252 in Germany and Sweden.
“Many Japanese have preferred a society of equals to one where people freely compete against each other according to effort and ability,” Keio’s Higuchi said.
“Thus, analyses that show social and economic disparities are widening have shocked the people.”
According to an annual survey on the national lifestyle conducted by the Cabinet Office, the share of people surveyed aged 20 and older who feel they are in the middle class dropped from its peak of 61.3 percent in 1973 to 54.2 percent in June 2005.
The share of those who say they are in the upper class has edged up slightly, from 0.7 percent to 0.8 percent.
The share of those who feel they are in the lower class rose from 5.5 percent to 7.3 percent over the same period.
The share of those who feel they have upper middle class living standards increased from 6.8 percent to 8.8 percent, while those who say their lifestyle is lower middle class also climbed, from 22.1 percent to 25.1 percent.
Higuchi and other experts attribute the sense of widening disparity to earnings differentials among workers that have become larger with the introduction of merit-based pay and terms of employment, as well as to a rapidly aging society, which puts a greater welfare burden on younger workers.
The Cabinet Office actually warned in its white paper last August that the number of young households that cannot afford to have children is increasing, and called for “comprehensive support” for people in their child-rearing years.
“Almost 20 percent of university graduates are working part-time jobs or casual work,” the white paper says. “This figure has increased sharply in recent years.
“The average annual income of a young person engaged in part-time or casual employment is 1.2 million yen, only around 30 percent of a fully employed counterpart.”
Behind this trend are drastic changes in the labor market following the bursting of the bubble and the financial sector crisis of the late 1990s, when key institutions, including Yamaichi Securities Co., went under, Higuchi said.
Many firms have restructured — laying off workers, replacing full-timers with nonregular workers and moving manufacturing overseas. Meanwhile, the government has scaled back on pork-barrel projects due to the budget deficit.
All these factors have combined to deprive young people, and even those in their 30s and 40s, of opportunities to find full-time employment, Higuchi said.
Even though the economy is showing signs of recovery and an increasing number of companies plan to hire more fresh graduates starting this year, few expect the days of a continuously growing economy to return.
Masahiro Yamada, the sociology professor at Tokyo Gakugei University who penned “Expectation-Gap Society,” said this is because Japan, like all other industrialized countries, has moved beyond the stage of an industrial society based on mass production and mass lifetime employment.
“Technological innovation as seen in the information technology industry has prompted industrialized society to attach greater importance to productivity, accelerating the polarization of workers into successes and failures,” he observed.
“In such an uncertain situation, young people won’t have children at an early stage in life, except those who are well off or those having a ‘shotgun wedding,’ ” he said, linking the employment situation to the decline in Japan’s birthrate and more people marrying late.
Some, however, see a brighter side.
Yoichi Ito, chief economist at STB Research Institute, is one of the optimists.
He believes the widening of disparities is not a bad thing as long as it does not lead to a stratified society where people inherit power and authority.
“It may be a matter of fact that Japan’s Gini coefficient has outdistanced those in Europe and risen to the level of nations like the U.S. and Britain, and that more and more people are feeling they are part of the lower middle class.
“Still, it’s wrong to adopt policies that punish success just to save those who cannot keep up with the pace of socioeconomic changes in a globalized economy,” Ito said, noting the economy has started recovering despite the growing sense of social disparity.
The important thing is to sustain economic growth without reducing the social and economic vitality that stems from competition, he said.
“The more diverse the values a society accepts, the more meaning and incentives they can provide for young people to participate in social activities and reinvigorate society.”
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