The Year In Review: Japan in the News

John de Boer (University of Tokyo)

The key phrase appearing in Japanese newspapers for the New Year is "let's try to make this year better than the last." However, the international press has chosen to brush this wish aside and has reported a worrisome outlook for Japan in the year 2002. In fact, Japanese realize that they are in for a tough year. They are simply praying that they will be able to bear the tribulations that await them.

On January 4, the Washington Post led off with an article claiming that Japan's economic woes were creating a growing gap between the haves and have-nots. The consequences being a disappearing middle class, rising crime and disintegration of Japan's legendary reputation for safety. For a country where more than 90% of its citizens describe themselves as 'middle class' this news has huge implications. According to a research unit of Goldman Sachs Japan, income disparities grew by nearly 50% between 1995 and 2000. After 10 years of successive economic recession these statistics are beginning to show in the form of class polarization, something that will fundamentally change Japanese society says the Washington Post.

According to Ken Hijino of the Associated Press, protracted economic stagnation has also created great regional inequalities throughout Japan. Peripheral prefectures are being hit much harder than large cities such as Tokyo. Rural economies that were heavily dependent on public works projects are now reeling in pain after sharp cuts in government spending. The perception among those affected is that Tokyo is casting the rural citizens aside. Hijino claims that this pain is unleashing growing resentment towards Tokyo and causing further division within Japan.

Meanwhile, another article by the Associated Press reported that 80% of Japan's top executives predict that unemployment will rise above 6% in 2002 ("Japan Joblessness Predicted to Rise," AP January 2). As a strategy to combat unemployment Rengo, Japan's largest labor union, has for the first time in history decided not to make any demands for a wage hike and is instead considering the endorsement of a work-sharing plan. This plan originally proposed by Nikkeiren (or the Japan Federation of Employer's Association) calls for employees to agree to shorter working hours and reduced pay. However, according to Kwan Weng Kim of the Singapore Strait Times a fundamental difference exists between the two organizations regarding the desired objectives of this proposal. While Nikkeiren is promoting this strategy to save jobs and overall costs to the benefit of employers, Rengo hopes that it will create employment opportunities for those already unemployed.

Despite reassuring the nation that short-term economic deterioration will be worth the sacrifice, PM Koizumi has a difficult path ahead with the country divided along class, regional and political lines. He must not only to bring Japan's economy back on track but has to halt the trend towards growing inequality. We all know that there will be losers and winners in a capitalistic market based economy, nevertheless, the priority must always be to reduce inequality.

Articles:

• Kwan Weng Kim, "Work-Sharing: Japanese see it as a way to save jobs," Singapore Strait Times, January 5, 2002.
• "Koizumi to take the hard road," Financial Review, January 5, 2002.
• Doug Struck and Kathryn Tolbert, "In Japan, a Growing Gap between Haves and Have-Nots," The Washington Post, January 4, 2002.
• "Japan Joblessness Predicted to Rise," The Associated Press, January 2, 2002.
• Ken Hijino, "Economic pain unleashes resentment of Tokyo," The Associated Press, January 2, 2002.