Facing the "new" poverty problem in Japan

Japan is finally admitting that it has a relative poverty problem. After keeping poverty measurements secret for years, the government released it's data in 2007 to a huge uproar.

The reason for this secrecy is mostly due to the stigmatization that the poor people face. 80 percent of those who are below the poverty line are the working poor. These people may have enough to eat but may lack in health insurance or some luxuries.

In trying to compete with the many low wage jobs in China, Japan created it's own low wage workforce. Now the nation is trying to come to terms with the income inequality it created.

From the New York Times, writer Martin Fackler gives us some background on Japan's economy.

After years of economic stagnation and widening income disparities, this once proudly egalitarian nation is belatedly waking up to the fact that it has a large and growing number of poor people. The Labor Ministry’s disclosure in October that almost one in six Japanese, or 20 million people, lived in poverty in 2007 stunned the nation and ignited a debate over possible remedies that has raged ever since.

Many Japanese, who cling to the popular myth that their nation is uniformly middle class, were further shocked to see that Japan’s poverty rate, at 15.7 percent, was close to the Organization for Economic Cooperation and Development’s figure of 17.1 percent in the United States, whose glaring social inequalities have long been viewed with scorn and pity here.

But perhaps just as surprising was the government’s admission that it had been keeping poverty statistics secretly since 1998 while denying there was a problem, despite occasional anecdotal evidence to the contrary. That ended when a left-leaning government led by Prime Minister Yukio Hatoyama replaced the long-governing Liberal Democratic Party last summer with a pledge to force Japan’s legendarily secretive bureaucrats to be more open, particularly about social problems, government officials and poverty experts said.

“The government knew about the poverty problem, but was hiding it,” said Makoto Yuasa, head of the nonprofit Antipoverty Network. “It was afraid to face reality.”

Following an internationally recognized formula, the ministry set the poverty line at about $22,000 a year for a family of four, half of Japan’s median household income. Researchers estimate that Japan’s poverty rate has doubled since the nation’s real estate and stock markets collapsed in the early 1990s, ushering in two decades of income stagnation and even decline.

The ministry’s announcement helped expose a problem that social workers say is easily overlooked in relatively homogenous Japan, which does not have the high crime rates, urban decay and stark racial divisions of the United States. Experts and social workers say Japan’s poor can be deceptively hard to spot because they try hard to keep up the appearance of middle class comfort.