Japanese Prime Minster Shinzo Abe’s aggressive economic policies — dubbed by observers as “Abenomics” — can probably be called as a relative success in terms weakening the yen and driving the country’s export-focused industries because of monetary easing. But some are saying that it has remained unable to support the increasing poverty rate in Japan, which is currently among the worst in developed nations.
Abenomics is anchored on more revenue in light of the increase in sales consumption tax. The former 5 percent rate was raised to 8 percent this April, which saw many consumers tighten their belt on spending. And with the government slashing welfare benefits, the poor in Japan remain poor instead of improving their status in life. Currently, Japanese people in and under the poverty line – those defined as having temporary, part-time and non-regular jobs — comprised 38 percent of the current population, a huge 19.7 million souls. And while Abe has promised to help revive economy, it doesn’t necessarily translate to removing poverty altogether. According to Takashi Oshio, professor at Hitosubashi University who specializes in social security, “The Abe administration’s stance is more about fixing things, including poverty, with a trickle-down effect from overall economic growth.” He added, “There’s little political capital spent on issues like alleviating child poverty. It doesn’t garner votes.” But apart from that, the real problem lies in the fact that as Abe’s economic recovery relies on heavy consumer spending and with more people affected by poverty, lesser would be able to practice purchasing power.
Apart from the economic burden poverty brings, other social problems also pose a concern such as poor health, quality of education and increase in crime. Economist Makoto Saito from the NLI Research Institute noted how poverty widens education gap and therefore narrows the number of qualified workers in specific positions. As such, many economists suggest that the only way to address poverty is to fix wealth distribution in terms of benefits and taxes.
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