In the land of working poor
Jan Sýkora (Charles University)
Paper short abstract:
The paper focuses on the social consequences of structural reforms implemented by the Abe administration which resulted in widening of the gap between rich and poor. The relatively new phenomenon of rising inequality is discussed in both theoretical and empirical approaches.
Paper long abstract:
During the last 20 years word "reform" came to be a common element in the vocabulary of Japanese politicians. In fact, the reform usually meant nothing more but the "regulatory corrections" related more to the political than economic agenda, and the applied economic policy was considered just as a "rescue act". However, the situation has changed since Abe Shinzo introduced his economic policy based on the concept of the three arrows aimed at the revitalization of the stagnant economy. While the mix of the monetary and fiscal measurements have produced some positive effects, the structural reforms, particularly the labour market one, have brought about the relatively new phenomena in Japanese society - economic disparity, rising inequality and increasing poverty. Although some academic studies disagree with the hypothesis that Japan has suddenly been transformed in a strictly divided society, it is obvious from various statistical data that the poverty rate has increased dramatically in the last few years. The number of the "working poor" who earn less than two million yen a year increased to 11.39 million and accounts for one out of every four workers since Abenomics was implemented. Meanwhile, the number of extremely wealthy people whose income exceeds 500 million yen a year went up 1,415 and the total income of these super rich was about 2.33 trillion yen. Indeed, in 2015 Japan (with China) had the fastest-growing HNWI populations in the world, which results from boosting stock values caused by implementing "aggressive" quantitative monetary easing measures. In my presentation I am going to discuss the problem of how the structural reforms of Abe administration resulted in a widening of the gap between rich and poor. I will focus particularly on the absence of the so-called "fourth arrow" of Abenomics, i.e. the relevant social policy including the long-term consequences.
Employment, labour markets and career structures