Inequality and Precarity in Japan: The Sorry Achievements of Abenomics

Abstract

Japan was known as the home of a strong middle-class in the affluent 1980s, the fruits of its prosperous economy distributed more equitably than in many comparable high-income countries. Yet strictly speaking, contrary to popular perception, Japan was not that “egalitarian.” However, public credence was set and the Wall Street Journal (1989) to tellingly (if hyperbolically) characterize this secure society with impressive equality and principled values as “the only communist nation that works.” Then, sea changes followed. This once “egalitarian” society is now widely (not least in Japan) recognized as a kakusa shakai (unequal society) in which income and wealth have become more unequally distributed than in many advanced economies. While widening wealth gap between rich and poor is a global trend as shown in the graph by Thomas Piketty and his co-researchers (Figure 1.1), in the case of Japan, in recent decades this has been accompanied by economic stagnation, rising levels of poverty, precarity, and public debt grafted on top of population aging. Against these backdrops, the second Abe Shinzō government started its economic policies, proclaimed as Abenomics, in an effort “to sustainably revive the Japanese economy” that was promised to trickle-down to all. Five years on, evaluations have taken place on the Abe program centered on hyper monetary easing, fiscal stimuli, and structural reform.