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May 31, 2008


Poverty and Sustainability: What is the Gap Issue in Japan?

yuasasan.jpg Copyright JFS

Lecturer: Makoto Yuasa, Chief of the secretariat of non-profit organization, Moyai (Independent Life Support Center).

I have been involved with the issue of homeless people and rough sleepers since 1995. We cooked and slept together on the street until 2002, and now I assist needy people at a non-profit organization called Moyai, which means "tying boats together" in Japanese. Today, I would like to talk about the actual poverty situation in Japan based on my experience.

Diversification of Poverty

The situation of people who consult with Moyai has changed significantly in the past few years. Here are some specific examples.

A male at 41 is an interior carpenter. He has 15 years of experience, but the wage-rate per work and number of orders decreased due to economic situation. Now he earns only about 100,000 yen (about US$952) per month and sleeps on the street.

Another male at 33 has been working as a temporary staff here and there for over ten years after graduating from junior high school. But in April, his contract was terminated. He stayed at Internet cafes and tried to look for another job, but before he finds one he went broke.

Another male at 35, married with children, also works as a temp and his nominal monthly pay is about 170,000 to 200,000 yen (about US$1,620-1,900). Out of that, he has to pay 80,000 yen (about US$762) for company dormitory, 20,000 yen (about US$190) for electricity, 25,000 yen (about US$238) for gas, and some more for furniture rental, employment insurance and social insurance. At the end, he has less then 50,000 yen (about US$476) left each month. He called us saying that he was a pitiful father who was not able to buy an 8,000 yen (about US$76) bag specified by his children's elementary school.

People who visited our office for consultation used to be mainly day workers and single mothers. I call them as "classic poverty group." They have always been in poverty even during the Japanese rapid economical growth period between 1960s and 1970s. Recently, however, other people from general households are facing poverty. Recent trend shows that the poverty situation is diversified.

Current Status of Safety Nets

There are three major safety nets in Japan: Employment, social insurance and public assistance. First, let's look at the employment.

When we divide the labor market into core regular workers, peripheral regular workers and irregular workers, unemployment will be below irregular workers. The poverty used to start at the borderline between irregular workers and unemployment. As long as we stay and work in the labor market, we were able to make living.

But nowadays, irregular workers visit us for consultation. The poverty borderline has moved up to the area between core and peripheral regular workers. It also means that the labor market is sinking. Of course, regular workers are not secure either. A good example is the shop managers at McDonald's, which was in the recent news. The nominal managers had little authority and did not get paid for overtime.

Employment is insecure. Then how about the second safety net, social insurance? The first thing that comes to our mind is unemployment benefits, but only 21.8 percent of unemployed people received unemployment benefits in 2006, with a drop of one third from 59.7 percent in 1982.

Consequently losing job means losing income for the majority of people. They would need to do something urgently, going on welfare, for instance. Now we turn to the third safety net, public assistance. Article 25 of the Japanese Constitution states, "All people shall have the right to maintain the minimum standards of wholesome and cultured living." We have the Public Assistance Law.

How many people are on welfare? Nearly all applicants in their 20s to 40s are turned down at the inquiry counter of welfare offices unless they are severely ill and need to be hospitalized or have a physical disability certificate. The Japanese government has not conducted any studies on this situation since 1965. According to several scholarly studies, about 15 or 20 percent of people who live below the poverty level specified by the Public Assistance Law are on welfare.

Currently, 1.54 million people (1.1 million households) are on welfare. Additional 8.5 million people, equivalent of the total population of Tokyo's 23 Wards, live under the level guaranteed by the Constitution, but they are in poverty without receiving public assistance. This is the reality of poverty issue in Japan.

Quintuple Exclusions Behind

One typical question I get from reporters is "What kind of people become needy?" I answer that there are quintuple exclusions behind poverty. These exclusions are from: educational process, cooperate welfare, family welfare, public welfare and the person itself.

Nowadays, the average child's education expense up to university graduation is 23.7 million yen (about US$225,714). Japan is 29th among 30 OECD countries in terms of the public spending on education versus GDP, which means individuals bear most of the expenses. In reality, poor people cannot go to universities.

The high school advancement rate is 98 percent, maintaining a high level for the overall population ratio. However, junior high school graduates account for 55 percent of people living on the street. Among those who live at Internet cafes, 19 percent is junior high school graduates and 22 percent is high school dropouts. It shows that people with low education levels will face overwhelming disadvantages when they start to work. Poverty begins at the exclusion from education.

There is a serious intergenerational chain of poverty behind this. The children who are from needy family become needy. If people are raised in a needy family without higher education, they won't be able to find a decent job. You can go to a job placement office and check out the job openings for junior high school graduates. These people are also excluded from cooperate welfare.

Not everyone become needy even if they can't find a good job. The average annual income of job hoppers in Japan is 1.4 million yen (about US$13,333). Even with the monthly income of about 110,000 or 120,000 yen (about US$1,048-1,143), people don't think they are needy if they live with their parents. Families more likely function as a social safety net in Japanese society.

Otherwise, it would be impossible to pay pension premiums, health insurance and residence tax in addition to living expenses. People can't seek help at the welfare offices because as I said, public welfare basically does not assist them. This is the exclusion form public welfare.

After the quadruple exclusion, finally people face the exclusion from themselves. For instance, consider suicide. We are seeing abnormal trend in Japan that over 30,000 people committed suicide for nine consecutive years. Out of that, about 30 percent (10,000 people) is said to have committed suicide due to economical reasons. That's poverty. People choose suicide as an extreme exclusion from themselves when they can't think that they can try harder and continue to live.

Poor Doesn't Mean Poverty

Maybe we can say poverty is the state without any "stock." Stock here means something like a barrier that covers people. For example, having money is a financial stock. Having parents, relatives and friends to depend on is a stock in personal relationship. Confidence in ourselves and positive thinking are mental stock. When overall stock is low, people fall into poverty.

People with stock can get by for a while and deal with the problem calmly. Even if they lose a job, they can take time and look for another job that suits them as long as they have some savings. If they have stock in personal relationship, a friend may be able to introduce a job.

The Japanese definition of poverty is those who are below the welfare standard. The average monthly income eligible for public assistance in Japan is 100,000 yen (about US$952). People who are below this level are officially approved as needy. Such standard is necessary, but it only considers a formal indicator, income, and poverty issue is more than just financial income.

Some say "We were all poor before. We worked hard to turn things around." Indeed the income might have been low, but people probably had stock, in other words, families and mutually supporting community. It might have been "poor" but not "poverty."

Since this stock is invisible, few people are aware of the stock they have. It is only natural that successful people especially want to think they worked hard for what they are now.

Measures to Avoid Putting off the Burden to Next Generation

It makes me wonder so much why the Japanese government does not implement any effective measures for poverty issue. I think the elite people who become politicians usually have huge stock and they don't know the actual situation of poverty. They naively say that "we are making policy measures for people to work hard and escape from poverty," but they don't realize that reasonable conditions are required for people with quintuple exclusions to "work hard." We should not just press people to work hard before promoting to create the necessary environment.

Let's stop thinking like we deal with poverty issue because we feel sorry for them. It is the measures necessary for the society to alleviate its own poverty and improve its sustainability.

Current job hoppers and irregular workers are the second-generation of baby boomers who built an asset during the high economic growth era. They have a choice to live on the asset. This is the stock of family and that is why the poverty issue has not been socialized. However, the following generation will see massive number of people in poverty.

I don't think a country is sustainable if it can't guarantee the "right to maintain the minimum standards of wholesome and cultured living" as stated in Article 25 of the Japanese Constitution and the right to life. I believe we need to build a society that provides the environment in which most people can at least equally work hard by themselves.


Makoto Yuasa is chief of the secretariat of non-profit organization, Moyai (Independent Life Support Center).
Engaged in rough sleepers and homeless support in 1990's. He continues to address the poverty issue in modern Japan from the field by pointing out the issue of "Net Cafe Refugees" several years ago and accusing the poverty business on exploiting the needy. He also works on building a network for anti-poverty. Author of Coming of Poverty and Welfare Application Manual for People who are in Real Trouble, etc.