Japan Confronts Rising Inequality
2021-10-17
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1Japan's stock market has increased and luxury cars are selling well in Tokyo after eight years of economic growth under Abenomics.
2Abenomics is the economic policy begun under former Prime Minister Shinzo Abe.
3Under the policy, the Japanese government has used government spending and made lending money easier to help the economy.
4But recent data show that Japan's new wealth is centered in a small part of the population rather than spread widely.
5New Prime Minister Fumio Kishida has said dealing with that issue is important.
6Kishida has promised to deal with income inequality which the coronavirus health crisis has made worse.
7But he has offered few ideas as to how he will do so.
8"It's like everyone has become poor," said Masanori Aoki.
9He owns a small coffee shop in a working-class area of northeast Tokyo.
10"With Abenomics, the finance minister talked about wealth trickling down.
11But there was no such thing, was there? Almost nothing," he said.
12He took a job as a part-time bus driver when the COVID-19 pandemic forced him to temporarily shut down his store.
13Kimie Kobayashi works at a childcare center in Tokyo.
14She says her wages have not increased for four years.
15She said many who work in the industry have learned that wages rarely increase.
16"I can't say that my livelihood is getting any better," said Kobayashi.
17"The government collects tax but that money isn't used to help people who are really in need."
18Abenomics failed to create wealth to households through higher wages, data show.
19In a study by the Organization for Economic Cooperation (OECD), Japan's poverty rate is the second highest among G7 nations and ninth highest among OECD countries.
20That information is based on data available up to 2020.
21Wages rose just 1.2 percent from 2012 through 2020, government data showed.
22Japanese households' average wealth fell by 3.5 percent from 2014 to 2019.
23However, another government study showed that the wealthiest 10 percent saw an increase.
24Inequality is far more evident in countries such as the United States and Britain.
25Japan stood around the middle of 39 countries examined by the OECD in 2020.
26The situation did improve for some in Japan.
27Manabu Fujisaki recently spent 7 million yen, about $62,000, on a Mercedes-Benz automobile using money made from investing in cryptocurrencies.
28A cryptocurrency is a form of digital money that is not regulated by a central bank and whose records are stored in an encrypted computer database.
29Fujisaki said he plans to build a 200-million-yen house in Tokyo next year.
30Department store Takashimaya says there is high demand for Patek Philippe watches that cost more than 10 million yen.
31And Alfa Romeo vehicle sales from April to September more than doubled from sales in 2020.
32Sales of other imported vehicles like Ferrari, Jaguar and Maserati also increased, industry data showed.
33Takahiro Koike runs the department store Isetan.
34He said, "We're seeing a clear rise in demand for luxury goods among the new rich."
35By new rich, he means newly wealthy young businessmen and other high earners.
36Kishida hopes to narrow the wealth disparity by forming what he calls a "new type of capitalism."
37That includes higher wages for public health and medical workers, and tax breaks to businesses that raise pay.
38Shigeto Nagai is an economist at Oxford Economics.
39He said offering short-term tax breaks is not likely to influence businesses to raise wages.
40Instead, Nagai suggests reforms in areas such as Japan's strict labor system.
41I'm Jonathan Evans.
1Japan's stock market has increased and luxury cars are selling well in Tokyo after eight years of economic growth under Abenomics. 2Abenomics is the economic policy begun under former Prime Minister Shinzo Abe. Under the policy, the Japanese government has used government spending and made lending money easier to help the economy. 3But recent data show that Japan's new wealth is centered in a small part of the population rather than spread widely. 4New Prime Minister Fumio Kishida has said dealing with that issue is important. Kishida has promised to deal with income inequality which the coronavirus health crisis has made worse. But he has offered few ideas as to how he will do so. 5"It's like everyone has become poor," said Masanori Aoki. He owns a small coffee shop in a working-class area of northeast Tokyo. 6"With Abenomics, the finance minister talked about wealth trickling down. But there was no such thing, was there? Almost nothing," he said. He took a job as a part-time bus driver when the COVID-19 pandemic forced him to temporarily shut down his store. 7Kimie Kobayashi works at a childcare center in Tokyo. She says her wages have not increased for four years. She said many who work in the industry have learned that wages rarely increase. 8"I can't say that my livelihood is getting any better," said Kobayashi. "The government collects tax but that money isn't used to help people who are really in need." 9Abenomics failed to create wealth to households through higher wages, data show. 10In a study by the Organization for Economic Cooperation (OECD), Japan's poverty rate is the second highest among G7 nations and ninth highest among OECD countries. That information is based on data available up to 2020. 11Wages rose just 1.2 percent from 2012 through 2020, government data showed. Japanese households' average wealth fell by 3.5 percent from 2014 to 2019. However, another government study showed that the wealthiest 10 percent saw an increase. 12Inequality is far more evident in countries such as the United States and Britain. Japan stood around the middle of 39 countries examined by the OECD in 2020. 13The situation did improve for some in Japan. Manabu Fujisaki recently spent 7 million yen, about $62,000, on a Mercedes-Benz automobile using money made from investing in cryptocurrencies. A cryptocurrency is a form of digital money that is not regulated by a central bank and whose records are stored in an encrypted computer database. Fujisaki said he plans to build a 200-million-yen house in Tokyo next year. 14Department store Takashimaya says there is high demand for Patek Philippe watches that cost more than 10 million yen. 15And Alfa Romeo vehicle sales from April to September more than doubled from sales in 2020. Sales of other imported vehicles like Ferrari, Jaguar and Maserati also increased, industry data showed. 16Takahiro Koike runs the department store Isetan. He said, "We're seeing a clear rise in demand for luxury goods among the new rich." By new rich, he means newly wealthy young businessmen and other high earners. 17Kishida hopes to narrow the wealth disparity by forming what he calls a "new type of capitalism." That includes higher wages for public health and medical workers, and tax breaks to businesses that raise pay. 18Shigeto Nagai is an economist at Oxford Economics. He said offering short-term tax breaks is not likely to influence businesses to raise wages. Instead, Nagai suggests reforms in areas such as Japan's strict labor system. 19I'm Jonathan Evans. 20Kantaro Komiya and Leika Kihara reported on this story for the Reuters news service. Jonathan Evans adapted this story for Learning English. Mario Ritter, Jr. was the editor. 21________________________________________ 22Words in This Story 23luxury - n. something that is expensive and not necessary 24trickling - v. slowly moving in small numbers or amounts