Last night, I stumbled upon the fact that the late ’50s student Leftist group Bund is now a political NGO working towards the establishment of an emperor-less Japanese republic and greater environmental consciousness. They currently have an essay on their website railing against Koizumi’s free-market reforms and the fact that Japan has now made the OECD Top Five in income inequality. I found the latter to be very shocking.
According to the OECD data available here, the Relative Poverty rating for Japan is now 15.3% — which means that 15.3% of the population lives on one-half the average income. This is significantly greater than the OECD average of 10.2%, and Japan is only outdone by Ireland, Turkey, the United States, and Mexico (although not all OECD countries are reporting). Especially in recent days, the growth of wealth in the United States has gone hand in hand with an unfortunate discrepancy in incomes, and the American economy is now the international symbol for 21st century global capitalism — efficiency at the cost of equality. That being said, the relative poverty rate of the U.S. is 17.1% — only a few points greater than Japan’s rate. And what’s more, Japan’s famously low Gini coefficient — now at 31.4 — has reached above the OECD average and is much greater than the Ginis of the more progressive European countries.
Marxist scholars like David Harvey believe that income inequality is inherent in the “late capitalist system,” so we should hardly be shocked that the Number Two world economy has become segmented among class lines. For a long time, however, Japan has been widely perceived as “classless” and an exemplary case of “fair” capitalism. These new developments thus question the foundation of that enduring national image and call for a re-evaluation of past perspectives.
In a wider view of history, Japanese income equality is a relatively new concept. Before World War II, the Japanese social structure consisted of a very elite, wealthy capitalist class and a mass of poor farmers and workers. But the destruction of domestic infrastructure and the loss of the Asian colonies completely decimated the upper classes’ vast fortunes at the end of the war. This cleared the stage for a far more equal economic realignment, further reinforced by the liberal New Dealers’ vigorous land reform campaign and strong union positions in early wage negotiations. During Japan’s dramatic economic rise from the early 1950s to the mid 1970s, the benefits were equally distributed to almost all members of society, and moreover, Japan suddenly had a massive “New Middle Class” that set the lifestyle standard for the new post-War era. Both economically and psychologically in the 1960s, it was fair to say that Japan was a “middle class nation.”
From the 1970s on, however, the Gini coefficient slowly began to increase, and the speculative growth of the Bubble era mostly benefited those with pre-existing real estate or financial holdings. When the economy bit the dust in the early ’90s, non-essential employees were out of work and companies began to reduce recruitment of young graduates. All in all, Japan’s economy stagnated for a decade, and the subsequent destruction of the old employment system — and rise in “unfair” meritocratic salary schemes — started up a vicious trend in income inequality. Very few people, however, imagined the class divides would be inching near American levels.
Despite the growth in relative poverty, most observers would have a hard time finding Japan to be a “class society.” There is still no real underclass, besides a small minority of non-assimilating Koreans and silently-repressed burakumin. But most importantly, all eyes are on the Tokyo megalopolis — a city with very few neighborhoods approaching “ghetto” status. Despite the rise of homeless men inhabiting the major parks in recent years, one would have to step off the beaten path to find authentically downtrodden neighborhoods more frightening than what is seen in most other major capitals.
The Japanese countryside, however, is a completely different story. The central bureaucracy’s “economic development” plan for the prefectures has always involved massive construction projects and no real assistance with the establishment of regional industries. And now that the major Japanese companies are closing their domestic factories and moving jobs to China, a vast majority of the inaka offers very little opportunity for young workers.
Whether all income inequality can be attributed to “American”-style capitalist reforms, the restructuring of Japanese corporate employment to a more sound globally-competitive position certainly did wipe away a lot of the safeguards built into the old system. The rise of income equality in the Bubble era, however, suggests that the Japanese system did not provide a perfect answer to “natural” unfairness in capitalist economies irregardless to what happened next. Whatever the case, recent data tell the story of a class-structured Japan, and as we’ll see next time, class consciousness, marketing strategies, and cultural creation are all changing accordingly.