The rise of poverty in Japan: the emergence of the working poor

Japan has no official “poverty line,” and subsequently no official statistics on poverty. In practice, the public assistance’s “minimum standard of living” (below which subsistence benefits can be claimed) is used to calculate the poverty rate, or the OECD index, which is defined as 50% of the population’s median income. No comprehensive survey has yet been conducted by the government on the current state of poverty in Japan. In its annual report for 2006, the Ministry in charge of economic and fiscal policy, incidentally questioned the OECD’s estimations on Japan’s poverty rate; the OECD had assessed Japan’s relative poverty rate in 2000 to be 15.3%, the fifth highest ratio amongst OECD countries. Regarding absolute poverty, the Ministry’s report stated that “from the viewpoint of absolute poverty, it is difficult to state that Japan is currently facing a severe issue.” However, studies by several economists reveal a worrying increase in the very low-income population; this is accompanied by the fact that current safety nets such as social security and public assistance have large gaps in their personal scope. Also, according to several economists relief by public assistance for example does not surpass 16% to 20% of the estimations on families in need. This means that there are a significant number of families with low incomes and who do not receive relief from the State, although they are in need of assistance. Poverty is not only a matter of income. The famous economist, Amartya Sen, has defined it as a “capacity deprivation”. Indeed, poverty often involves,