The Rise of Social Class in Japan, Pt. I


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.

W. David MARX (Marxy)
January 16, 2006

Marxy wrote a lot of essays back on his old site Néomarxisme. This is one of them.

25 Responses

  1. Carl Says:

    “Down-Flow-Society” would be a good band name. We could get kanji tatoos of that and write masters theses together between solving groovy mysteries.

  2. Momus Says:

    This is purely anecdotal, but I get the impression of Tokyo being much more unequal than even Osaka, despite the fact that there’s nowhere quite as rundown in Tokyo as Nishinari. I got an extreme glimpse of this tonight when, arriving in Tokyo, I went into the absurdly chandeliered Hyatt Century to ask directions, then walked across Chuo Koen, full of homeless men living under blue tarpaulin.

    Isn’t the point about Gini coefficients precisely that they’re coefficients? In other words, there has to be a big span between rich and poor, in one place. Those inaka folks probably don’t see much like the Hyatt lobby out in the sticks.

  3. marxy Says:

    This is purely anecdotal, but I get the impression of Tokyo being much more unequal than even Osaka

    I haven’t seen much of Osaka recently, but it’s possible that the recession was more equally damaging than in Tokyo (where the elite of the new industries are rolling in money while the cab drivers are their unemployed former senpai.) If you know where to look in Tokyo, things can be extreme, but the road from Narita to Ginza is still paved in gold.

    Isn’t the point about Gini coefficients precisely that they’re coefficients? In other words, there has to be a big span between rich and poor, in one place.

    I’m not sure what you’re asking. A Gini coefficient of 0 is possible, which means that wealth is perfectly distributed.

  4. guest Says:

    About the Gini coefficient, am I missing something blindingly obvious or are the Gini indices offered by the OECD, the 2004 CIA World Factbook, and the 2005 UN Human Development Index Report completely out of whack? The HDI gives Japan a brilliant 24.9, second in the world, just behind Denmark! What’s going on here? See table 15 on page 62 here:

  5. Momus Says:

    I’m not sure what you’re asking.

    My point was that you said inequality or high Gini was invisible to people because they were only looking at Tokyo, not the countryside. And I’m saying that you wouldn’t see a high Gini spread by just looking at the countryside, because there isn’t such a big span of inequality there, just poverty. For a very visible big span between the richest and poorest 10%, Tokyo actually gives the best picture. Big cities are always more extreme; they have the richest and the poorest side by side, as I saw this evening in Shinjuku.

    I found it odd that you dismissed Koreans, burakumin and homeless people too, because in a Gini measurement they’d be quite a big chunk of the poorest 10%, therefore highly significant.

  6. marxy Says:

    I found it odd that you dismissed Koreans, burakumin and homeless people too, because in a Gini measurement they’d be quite a big chunk of the poorest 10%, therefore highly significant.

    I’m not sure I “dismissed” them as much as stated that they’re not an obvious underclass living in a “culture of perpetual poverty” like you (literally) see in the United States or other countries. For example, if you are bouncing between Aoyama, Shibuya, Daikanyama, and Nakameguro, you’re not going to see any poor people – at all. That’s not true if you were to hit Soho and the Lower East Side. You’d probably have to hit Delancy street at some point. Wouldn’t you say that Tokyo is probably one of the least extreme big cities of the world?

    Even with the homeless in the parks, central Tokyo still looks relatively poverty-free. It’s not until you leave Tokyo do you actually see the other half.

    The HDI gives Japan a brilliant 24.9, second in the world, just behind Denmark! What’s going on here? See table 15 on page 62 here:

    That table’s data for Japan was from 1993 (for some reason). The rise of the Gini has been very swift in Japan.

    Also, there is the “income” measure and the “income after tax redistribution” measure. Lately, Japan is .4983 and .322, respectively. That difference could lead to some confusion.

  7. alin Says:

    , but the road from Narita to Ginza is still paved in gold.

    you’re dreaming my boy, unless your driver , accidentaly or intentionally took you here. This is not the road from narita to ginza. The road from narita to ginza is just a normal road on the same standard to most major roads in this country. If anything, as most people notice the whole narita thing is very low key, grey affair, domestic haneda being much more up to date.

  8. marxy Says:

    Everytime I take the Limo Bus in from Narita, I can’t help but notice that Japan looks like a planned economy. I don’t get cliche “Blade Runner” vibe much on the street level anymore, but I am always impressed with how clean and neat Tokyo looks coming in from Narita at sunset.

    But you’re right to correct me: it’s not literally paved with gold.

  9. nate Says:

    I could have sworn that momus would say that the increase in income inequality was due to the post-consumerist lifestyles of the freeta.

    There is definitely a world of difference between tokyo poor and aomori poor. There are people in my neighborhood who burn lumber salvaged from construction sites for heat because they can’t afford the gas/kerosene; there are houses made out of wood that look less stable than the average yatai, you can often see straight into the houses from the outside between the planks.

    There are a couple of million dollar houses too.

  10. nate Says:

    re: inaka folks not seeing the hilton lobby.

    There are a couple of really nice love hotels in the ken, but none of the proper hotels really holds a candle to them in the marble and chandelier sense.

  11. marxy Says:

    I’ll dig into this more next time, but there’s a difference between “real” poverty and the freeter variety. I’m not sure how the 15% is split between the two.

  12. andrew Says:

    I’m not sure on which particular way poverty is being defined here, but I know the U.S. actually uses a different measure of poverty than than the European method. I think the OECD is the european one based off differences in income in the country itself, what it fails to note and the U.S. one does is that poverty is usually defined as the ability to buy goods and services and not by what percentage of the pop happens to live on an amount that’s such and such a percentage less than the average. No society has ever overcome the 80-20 rule where 80% of the pop controls 20% of the wealth (it’s even worse in business where 5% of businesses in one industry control 90% of the revenue). In fact a completely random distribtion of money still becomes 80-20 regardless of if all the people in it are equal (Duncan J. Watts showed this using small world networks) Hence the U.S. method of defining poverty by what you can purchase (i.e. a college education, a car, your mortage etc) is generaly more accurate at determining actual quality of life in terms of poverty. On the other hand the poverty as defined by the richest people in the country has a tendency to qualify people who are more lower-middle class as living in poverty when they’re not. Hence this figure might be misleading, although it is Japan and the cost of living is way higher than most places outside of France.

  13. nate Says:

    most of europe would also consider not being able to pay for health care an automatic indicator of poverty. but we americans know much better.

  14. Mark Says:

    Freeter or NEET? I was under the impression that Freeters were just those not committed to long-term employment by one company.

  15. marxy Says:

    Andrew’s comment: Very interesting, but I think the OECD’s measure of “Relative Poverty” is the same for each country: the % of the population living under 1/2 the average income. Now, you’re right, Americans may have lower costs and therefore less poverty than is actually reported, but with high health care costs etc., my guess is that it balances out. National health care in Japan isn’t great, but it’s way cheaper than any of the private plans in the U.S.

    Freeter or NEET?

    I don’t think “freeter” refers to highly-qualified white-collar workers who often change jobs (tenshoku). The freeter are a specific labor class of low-skilled, low-potential young people taking a string of non-career-based jobs. NEET is a more technical term for the same phenomenon. It’s not that they’re moving between companies in an American-style search for higher salaries; they have no career path.

  16. guest Says:

    Marxy said: “That table’s data for Japan was from 1993 (for some reason). The rise of the Gini has been very swift in Japan.”

    Ah-ha! Thanks for clearing that up. Japan’s “six reasonable men” must be spinning in their graves:

    By the way, great dialogue these days everyone! Don’t know that I’ve ever looked forward to part two of a blog entry (and its comments) before.

    However, I do wonder what we miss comparing class structure of OECD countries, considering, as Zizek puts it, “many of the American [Japanese] working class live in China.” Or even North Korea, if the country of origin sticker on a frying pan currently on sale is to be believed! I guess they have to give Japan something in return for all those junked bicycles.

    Maybe this is assuming too much reflection on the part of the consumer, but I’m trying to imagine what kind of person could watch the deservedly (for once) sensational media coverage of the brutality of life in North Korea and still buy said frying pan. 安いね!

  17. marxy Says:

    That’s an interesting perspective: if there are no longer borders in a globalized world, nations’ ginis are less important that world ginis.

  18. guest Says:

    Marxy, if you liked that, I highly recommend these two articles (if only for the poop jokes):

    Anyone consider the revolutionary potential of hikikomori? I’m only 99% joking. Perhaps their demonization and exclusion qualifies them for the role of “universal individual.” After all, what more perfect definition of the “universal individual” than “the ones who cannot be in [the] world?” An interesting article here (but the cliche-averse should proceed with caution):

    Maybe this is too harsh or off-base, but I can’t help but notice that one cure for hikikomori is participation in the sex/love industry in the form of the “rental sister” (デリヘル minus sex)! One might hope that hikikomori would refuse these enticements back to obscene normalcy and instead project their loathing outward (uh, in a positive way, of course) to the society that damaged and rejected them in the first place. But then again, I’m kind of hoping pigs will fly too.

    In the same article, Mariko Fujiwara of Hakuhodo (what did I say about cliches?) manages to give an admirably concise recitation of the ideology of Japan’s allegedly “un-ideological” Risk Society:

    “After World War II, … Japanese only knew a certain kind of salaryman future, and now they lack the imagination and the creativity to think about the world in a new way.”

    Pardon me for quoting Zizek at length by way of a response, but this is just too funny and spot-on:

    “The ruling ideology endeavors to sell us the very insecurity caused by the dismantling of the Welfare State as the opportunity for new freedoms. Do you have to change jobs every year, relying on short-term contracts instead of a long-term stable appointment? Why not see it as the liberation from the constraints of a fixed job, as the chance to reinvent yourself again and again, to become aware of and realize hidden potentials of your personality? Can you no longer rely on the standard health insurance and retirement plan, so that you have to opt for additional coverage for which you have to pay? Why not perceive it as an additional opportunity to choose: either better life now or long-term security? And if this predicament causes you anxiety, the postmodern or “second modernity” ideologist will immediately accuse you of being unable to assume full freedom, of indulging in the “escape from freedom,” of the immature sticking to old stable forms. Even better, when this situation is inscribed into the ideology of the subject as the psychological individual pregnant with natural abilities and tendencies, one automatically interprets all these changes as the results of their personality, not as the result of being thrown around by market forces.”

    And lastly, for readers of Japanese, I recommend the フリーターとは誰か issue of 現代思想:

  19. marxy Says:

    No article about Japan is complete without the “nail that sticks up” line and a quote from someone at Hakuhodo.

    I doubt Hikikomori have much explosive revolutionary potential. More like implosive revolutionary potential. They’re always on strike and we’re the scabs.

  20. Carl Says:

    I mocked the same article in a comment under “New Years’ Resolution for 2006.” Hikikomori are interesting in the sense that they’re the ultimate drop-outs from society, but it also seems like the basic facts of the story are being obscured in these articles. Namely: How do the hikikomori get food? They get it from their parents, directly as food left at their door or indirectly through money (!) from them. Why? Why don’t parents just say, come out and interact with society, or we won’t feed you or pay you. What the hell is wrong with the parents that this most obvious of solutions doesn’t dawn on them?

  21. guest Says:

    Have you ever seen the reality TV shows where parents confront their hikikomori children to demand that they reurn to society? They try to lure them out of hiding by screaming insults, throwing things, and beating them about the head while some stern mother-figure-type タレント watches and talks solemnly about all the trouble the hikikomori has caused the family. No suggestion that the situation might have anything to do with oppressive school/work situations, or, say, atrociously inept parenting (such as that being captured on camera). The victim is the only proper locus of blame.

  22. fukumimi Says:

    Nishinari/Kamagasaki : Osaka
    Sanya : Tokyo
    Kotobuki : Yokohama
    Sasashima : Nagoya

    Make no mistake, these are ghettos.

    What is frightening is that many people who live in these cities don’t even know these places exist.

  23. guest Says:

    Japan’s Gini index in the news:

    Cabinet Office to 負け組: DROP DEAD!

  24. marxy Says:

    Check that Japan Times article for a hilarious Horie reference already outdated.

  25. Carl Says:

    Either arrested or homeless. That’s Japan for ya.