Nobel Prized Economist, Dr, Paul Krugman meeting with Japanese PM and Finance Minister

Excerpt from "the third analysis meeting on international finance and economy, inviting Professor Paul Krugman of the City University of New York" 22 March 2016.
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Aso, Minister of Finance in Japan:
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During the 1930’s, I remember that in the United States likewise there was a situation of deflation. And the New Deal policies have been introduced by then President Roosevelt. As a result, it worked out very nicely, but the largest issue associated with it is that for a long pe...riod of time entrepreneurs and managers of companies did not go to make a capital investment by receiving the loan. It had continued up until the late 1930’s and that is the situation occurring in Japan too. The record high earnings have been generated by the Japanese companies but they would not spend in the capital investment. There are lots of earnings at hand on the part of the corporate in Japan. It should be used for wage hike or dividend payment or the capital investment, but they are not doing that. They are just holding onto their cash and deposits. Reserved earnings have kept going up. A similar situation had occurred in the US in the 1930’s. What solved the question? War!　 Because World War II had occurred during the 1940’s and that became the solution for the United States. So, let’s look at the entrepreneurs in Japan. They are stuck with the deflationary mindset. They have to switch their mindset and should start making capital investments. We are looking for the trigger. That is the utmost concern.
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Dr. Professor Krugman:
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The important point about the war from the macroeconomic point of view is that it wasa very large fiscal stimulus. That fact that it was a war is very unfortunate. It was simply something that led to a fiscal stimulus that would not otherwise have happened. In fact, the story in the 1930’s was that the New Deal, Roosevelt backed off the fiscal stimulus in 1937, because then, as now, there were many calls for balancing the budget.
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That was a terrible mistake. It caused the major second recession. Yes, obviously we are looking for ways to achieve something like that without war. There has been a good deal of talk about using not just moral suasion which has already been done perhaps as an incentive to induce the private sector in Japan to raise wages. I have no knowledge of the institutional details about what might work but I am certainly in favor of trying such measures. That is one thing that can happen. Other than that, the linkage between corporate earnings and corporate investment has always been weak. There has never been much reason to expect companies that have high profits to also invest, unless they see reason to expand capacity. And what is happening is that they have the deflationary mindset. They believe that Japanese growth will be weak.
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Clearly if we look at the behavior of wages, they expect, or at least fear, that Japan will slide back down towards very lower negative inflation. What is still needed is a shock to break that. That is escape velocity. This is part of what I mean by escape velocity by achieving enough. Escape velocity: the rocket that goes fast enough to not come down again.
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Nobel winner Stiglitz says world economy is in 'great malaise'

Nikkei Asian Review : 18 March 2016

TOKYO -- The global economy will be in a state of "great malaise" this year, Columbia University professor Joseph Stiglitz told the Nikkei Asian Review.  The Nobel Prize economist, citing the slowing Chinese economy and the struggling eurozone, predicted Thursday that 2016 would be "even weaker than 2015," the world's worst year since the global financial crisis.

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 Stiglitz described malaise as a situation where few people are suffering but almost no one is prospering, such as Japan's experience after 1989. "For the people on the top, it is OK, but ordinary citizens are finding it hard," he said. The economist met with Japanese Prime Minister Shinzo Abe on Wednesday and warned against raising the consumption tax to 10% from 8% in April 2017.

  "Japan's economy is not very strong," Stiglitz said. "And the global economy on which Japan depends so much is, I believe, in a very weak situation." Consequently, he said, "this is not the time to raise the consumption tax."
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  "Even earlier I said the consumption tax is not a right tax," he said. "Tax policy should be used for what you are worried about," including global warming, inequality and underinvestment. A carbon tax, for example, could help stimulate the economy.  Stiglitz also emphasized the necessity of fiscal stimulus. Considering that the global economy remains weak despite all the efforts of central banks, the "obvious implication is you need something else," he said. Stiglitz suggested investment in basic social needs such as technology, education and child care.
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 The impact of the Bank of Japan's negative interest rate policy introduced in February is relatively weak, but it is "better than nothing," Stiglitz said. He appreciated the BOJ's careful introduction of the policy, noting that some countries that adopted the negative rate policy earlier hurt banks' balance sheets and discouraged them from lending.
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 Stiglitz expressed concern about easing policy. He said quantitative easing led to more inequality in the U.S. because it helped shareholders but hurt the Treasury bill owners, who are disproportionally retirees. He said "many of the models central banks have used were not sensitive enough to these kinds of intergenerational effects," limiting the impact of monetary policy.

 

Toyota Motor pays no corporation tax

Toyota Motor pays no corporation tax

Japan Press Weekly: 1 June 2014

 

A series of articles： how Toyota Motor Corporation, the biggest donator of the ruling party LDP, has been given the preferential treatment by the government.

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Toyota Motor Corporation paid nothing in national corporation tax between FY 2008 and FY 2012, while distributing more than one trillion yen in total to its shareholders and adding a... consolidated earned surplus of 280.7 billion yen to its internal reserves. Toyota keeps any detail from public view how it was able to get away with paying the tax but it most likely made the best use possible of various preferential tax measures available to large corporations.
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For example:
- the foreign tax credit system deducts taxes, which overseas subsidiaries paid outside Japan, from the corporation tax payment in Japan;
- the R&D credit system deducts 10 % of research expenses from the payment for national corporation tax;
- the foreign dividend exclusion system excludes dividends, which overseas subsidiaries received, from taxable revenues in Japan; and
- the loss carry-over deduction system withholds the portion of past deficits in corporate income from the taxable amount.
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Auto-giant Toyota no longer makes its earnings from “production at home and exports to other countries”. It has now changed itself to a business establishment “distributing profits made from overseas production and sales as dividends to domestic shareholders”.
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While imposing a great deal of tax burdens on the general public, the government is again working on ways to provide further cuts in the corporation tax rate. The need is to correct such preferential tax measures for large corporations.
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http://www.japan-press.co.jp/modules/news/index.php?id=7240
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Toyota enjoys preferential tax measures
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Toyota Motor Corporation enjoyed the largest amount of tax cuts for corporate R&D among all companies in Japan in fiscal 2013, Akahata reported on March 8. The tax breaks for R&D spending is one of the special taxation measures targeting large corporations.
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Akahata estimated the amount of R&D tax reductions for Toyota based on the 2013 financial report and found that it comes to about 120 billion yen. This figure corresponds to the largest amount of R&D tax cuts for any company in that fiscal year, which was stated in the government taxation report released earlier.
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The second-ranked firm received an R&D tax break of 20.2 billion yen. The government report withholds companies’ names. Toyota’s operating profit hit a record high of nearly 2.3 trillion yen in fiscal 2013. The carmaker paid no taxes between 2008 and 2012. Japan’s preferential tax system, including tax reductions for R&D expenses, only serves a small number of major corporations. This is a result of political contributions from companies.
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In 2013, Toyota donated to the ruling Liberal Democratic Party 64.4 million yen, up 13 million yen from a year earlier. The Japan Business Federation (Keidanren), calling on its member corporations to make donations to the LDP, has been pushing for further R&D tax breaks. The Abe government intends to meet this outrageous demand..
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http://www.japan-press.co.jp/modules/news/index.php?id=8004
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JCP Majima: Toyota makes huge profits by exploiting subcontractors
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Japanese Communist Party lawmaker Majima Shozo said at a Lower House Budget Committee meeting on March 2 that Toyota Motor Corporation has forced its subcontractors to cut unit prices by a total of three trillion yen during the past 14 years.
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It is estimated that Toyota’s current net profits will reach a record high of 2.92 trillion yen at the end of March. On the other hand, the automobile company has pressed its subcontractors to reduce unit costs twice every year in the name of “cost improvements”.
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Majima pointed out that the Subcontractor Promotion Law stipulates that unit prices shall be decided through “negotiations” between parent companies and subcontractors, but in actuality, subcontracting companies are forced to accept the price asked by parent corporations. He quoted an owner of Toyota’s subcontractor in Aichi Prefecture as saying, “If we complain to authorities about the price, we will lose our contract.”
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Majima stressed that a unit price should be determined by accumulating production costs, not at the parent company’s own discretion. He urged the government to direct the car maker to stop exploiting its subcontractors.
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Industry Minister Miyazawa Yoichi replied that he shares a concern regarding this issue with Majima. Pointing to the fact that Toyota’s internal reserves amounted to an all-time high of 15.4 trillion yen at the end of fiscal 2013, the JCP parliamentarian demanded that the state push big businesses to pay fair unit prices to subcontracted small- and medium-sized businesses so that they can raise workers’ wages. Finance Minister Aso Taro said in response, “The government has no authority to make them do so, but you make an important point.”
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http://www.japan-press.co.jp/modules/news/index.php?id=7989

Toyota, the top donor to ruling party, is the largest beneficiary of R&D tax credit

 

Recent government data showed that the amount of tax credits for corporate R&D activities in fiscal 2014 reached a record high of 674.6 billion yen. The largest beneficiary, which received 108.4 billion yen in the tax credit, is Toyota Motors, Akahata reported on February 10.

Toyota, which benefited the most from this tax cut measure, is the most generous corporate donor to the ruling Liberal Democratic Party. It donated 64.4 million yen to the LDP’s political fund management body, far exceeding the second largest donor, Cannon, which donated 40 million yen.

After Prime Minister Koizumi Jun’ichiro expanded the scope of the preferential tax measures, the amount of R&D tax credits awarded to companies jumped from around 100 billion yen in 2003 to over 420 billion yen in the following year. The amount of the tax breaks further increased under the government led by Prime Minister Abe Shinzo.

According to government data, large corporations with a capital of more than one billion yen enjoyed 612 billion yen or over 90% of the R&D tax credits.

 

http://www.japan-press.co.jp/modules/news/index.php?id=9251

 

Want more daycare? Pay workers more

The Japan Times, Yen for Living: 2 November 2012

This article was published 3 years ago, but the situation remains same.
The Health, Labor and Welfare Ministry just released the results of a survey on quitting. Among the various categories of employment studied, education proved to be the field with the highest percentage of turnover: 48.8 percent of first-time teachers quit their jobs within three years of being hired. Though the study didn’t give reasons for the high turnover rate it isn’t difficult to figure out: Teaching children is a high-stress occupation with little monetary reward.

The same goes for a subset of education, daycare, which continues to pose a very real problem. The lack of daycare facilities for children not old enough to attend school is one of the main reasons young couples are not having more children. According to a recent feature in Tokyo Shimbun, the main reason there are not more daycare centers is that, while demand is increasing as more women remain in the workforce after giving birth, there aren’t enough hoikushi (nursery school teachers). And the reason there aren’t enough hoikushi is that wages are bad and getting worse.

The average monthly pay for a hoikushi, regardless of age or experience, is about ¥200,000, which is almost 40 percent lower than the average monthly pay across the board. But hoikushi tend to work longer hours than the average worker, especially since the Child Welfare Law was revised in 2001, thus allowing more private companies to set up for-profit daycare centers. Average pay for daycare workers dropped after 2001, and private centers tend to hire staff on a non-regular basis, meaning no benefits. According to HLW Ministry statistics, there were 1.12 million licensed daycare workers in Japan in April 2012. However, Tokyo Shimbun reports that few of these people actually work in daycare.

In order to be employed at a daycare center, either public or private, a hoikushi must be credentialed, meaning he or she has graduated from a special hoikushi program offered by a university or vocational school, or passed a test administered by the pertinent local government. Thousands of young people have the credential but apparently only acquire it for their resume, since it’s easy to get and looks good. Once they find out how bad working conditions are and how low the pay is they often seek work elsewhere.

Last spring an NHK program about the shortage of daycare facilities in big cities showed one center in Setagaya Ward, Tokyo, that said it had space for only 20 children and 80 on a waiting list. The manager said he might be able to take more children but he cannot find any workers. For every 20 positions advertised in Tokyo there is only one application. One professor at a university in Chiba told NHK that many students enter college interested in a career in childcare but once there they find out the real circumstances of the job and by the time they graduate decide to pursue other interests, even though it’s so easy to get a job in childcare and difficult to find employment in a “name” company. One student told NHK, “After I started studying I realized how hard it is to raise children, and the pay at daycare centers doesn’t justify that level of difficulty.”

Free market advocates may find the problem mystifying in terms of supply and demand. If so many parents are demanding daycare services then why don’t service providers just pay higher wages to get hoikushi and then take on more customers? The problem is that daycare isn’t a volume business, and the quality of “service” deteriorates rapidly as the child-to-worker ratio increases, though some local governments, according to Tokyo Shimbun, are easing daycare regulations to increase the ratio in order to get parents off their backs.

Most households, even those where both parents work, have a limited amount of money they can pay for daycare, so centers have to keep their fees low, even when they’re being subsidized, which is most of them. In the end, it comes down to how much local governments are willing to pay to fund daycare. Another possible factor is that daycare is traditionally considered woman’s work — the ratio of female to male hoikushi in Japan is 23:1 — and woman’s work still pays less.

http://blog.japantimes.co.jp/yen-for-living/want-more-daycare-pay-workers-more/

Who will look after Japan's elderly?

BBC News: 16 March 2015

Several times a night, Midori Ide wakes up to help her 96-year-old grandmother use the toilet. To make sure she can assist immediately, Midori sleeps right next to her grandmother.

It is not a duty that many 29-year-olds would enjoy. But she tells me she feels guilty that she can only do it once a week.

Midori works the other six nights of the week at a nursing home caring for other elderly people while her grandmother stays at a different facility.

"It's a dilemma but I need to earn money because my family isn't wealthy," she said.
"I also want to continue working because ever since my grandfather died when I was 15, I've decided to become a care worker and it is my calling."

But it comes at a cost. Midori dreams of going abroad. She misses spending time with her friends.
"I don't want my grandma to hear this but I am almost 30 and I worry if I can start my own family one day," she whispers.

"But I don't want to think about when my grandmother will stop waking me up. I want to be with her when she achieves her dream of turning 100," she says.

'Too tired'

 

Midori is one of 177,600 people in Japan aged between 15 and 29 who are caring for a family member. Not many would be as content as her with their decisions.

Image caption Japan has a rapidly ageing population with more than a quarter of its citizens over the age of 65

There is also a growing number of households where one elderly person is looking after another in need of nursing care. Just last month, a 71-year-old husband was arrested for killing his wife who had dementia. "I got too tired from looking after her," he confessed, according to local media. "I wanted to take my own life, too."

It was not a one-off tragedy. And they are the real people behind some staggering statistics about Japan's ageing and shrinking population.

Today, more than a quarter of Japan's population is aged over 65. This is set to increase to 40% by 2055, when the population will have shrunk from the current 127 million to 90 million.
The Ministry of Health, Labour and Welfare has warned that Japan will need to add one million nurses and care workers by 2025.

Temporary home

 

Encouraging immigration may seem like a simple solution - but it's not a popular one.
Japan is still one of the most ethnically homogeneous countries in the world, with foreigners making up less than 2% of the population. Opening up Japan to large-scale immigration is a very sensitive subject.

In 2008, the government started allowing foreign nurses and care workers in.
But the bar is set high. Having to pass the national exam in Japanese is incredibly difficult and only 304 foreign nurses and carers have so far managed to make Japan their temporary home.

Image caption Japan will need to add one million nurses and caregivers by 2025, the government has said

Prime Minister Shinzo Abe says he is keen to expand programmes for foreign workers including nurses but says they would be required to go home after three to five years.

"What the government is doing is not going to address the serious population collapse that Japan faces," says Hidenori Sakanaka, executive director at Japan Immigration Policy Institute.
"Japan needs 10 million immigrants over the next 50 years and we need to accept them as new members of our society," he says.

"If we educate our young people that Japan needs to become more multiracial to tackle the population problem, I think we can achieve it without causing major problems."

'Cultural difference'

 

But his opinions seem optimistic in light of a recent column by well-known author Ayako Sono.
While Ms Sono supported removing strict requirements to allow more foreign workers to enter Japan to look after the old, she said these workers should live in separate communities - prompting claims she was advocating policies similar to apartheid.

Her views are not mainstream. But the service industry, which hires foreign students as part-time employees, also received harsh feedback, especially at the beginning, from those unused to dealing with foreigners.

"In our survey, customers asked why they had to be served by waiters who cannot speak Japanese properly," said Naoki Ishino of restaurant chain Negishi. "Some simply asked why we were hiring Chinese people.

"There were also cultural differences. For example, our foreign staff found it very difficult to apologise when a customer complained about a mistake made by a colleague."
After training them under a supervisor from their own country, Mr Ishino says things started to improve.

But allowing a limited number of foreign students to work in restaurants is a far cry from the influx needed to care for Japan's rising number of elderly people.
And there are no immediate solutions on the horizon.

Image caption Midori says she likes caring for her grandmother but misses her friends and travelling

"Japan has been excessively conservative about the introduction of immigrants and we need to deregulate," says Seijiro Takeshita of Mizuho International.

But he says Japan needs to be sure this would not harm "the homogeneous group ideology", given that "failure of multiculturalism in Europe" has, he says, led to social conflict.
Midori says she enjoys caring for her grandmother but she's likely in a minority.

She also has elderly parents who will soon need to be looked after. For those who don't have a relative to help them, with indigenous resources overstretched, the future is a worry.
Japan needs to find a solution, fast.

http://www.bbc.com/news/world-asia-31901943

Caring for His Elderly Dad Made This Japanese Businessman Homeless

Bloomberg Business: 20 December 2015

When Akihiro Takano resigned from his well-paid job as an events manager at a Tokyo department store at age 45 to take care of his ailing father, he had no idea he was about to slip down the ranks of society until he was penniless and living in a park.

After his father’s death, Takano struggled to make ends meet with a series of insecure jobs while keeping an eye on his frail mother. Nine years later, in 2009, he spent the last of his savings on her funeral, fell behind on rent and was evicted from the apartment that had been the family home for 30 years.

Akihiro Takano

Photographer: Akio Kon/Bloomberg

He left with his mother’s ashes in an urn and her pet cat in a cage. Now, back on his feet thanks to a chance encounter with a group of volunteers, Takano has paid work as a counselor for people on low incomes and has become a public face for what the Japanese refer to as “kaigo rishoku,” or the growing phenomenon of job loss due to caring for elderly family members.

“My boss told me that once you take off your necktie, it’s not easy to put it back on,” Takano said in an interview as trains clattered by outside the office of a charity in Saitama, north of Tokyo, where he works sometimes. “I had stepped on a slide with no means of stopping. But I didn’t realize it myself -- I thought I would manage somehow.”

More than 100,000 people a year in Japan leave their jobs to care for sick relatives, according to the government, and most of them remain unemployed.

Baby Boomers

The tally is set to balloon as the nearly 7 million-strong baby-boomer generation reaches the age of 75 in the coming decade, potentially dragging their children from the workforce in their prime earning years. That’s something Japan can ill afford, as the working-age population shrinks due to the low birthrate and the government’s rejection of immigration.

Prime Minister Shinzo Abe in September vowed to stem the flow, which he referred to as an “imminent crisis.” In a speech, he set out targets for growing the economy to 600 trillion yen ($4.9 trillion) from the current 500 trillion yen, preventing the population from falling below 100 million from the current 127 million, and enabling as many people as possible to work, whatever their family responsibilities.

More Beds

As a first step, the government last month announced plans to provide an extra 120,000 people with beds in homes for the elderly or other forms of support by the early 2020s, on top of a previously planned increase of 380,000 beds over that period. Regulations will be eased to make it easier to open nursing homes in major cities and entitlements to leave and allowances will be revised
The measures may boost Japan’s workforce by a modest 0.2 percent a year, Mark Williams and Marcel Thieliant of Capital Economics said in a report this month. Still, some researchers say the government’s proposals don’t address the complexity of the issue.

“It’s not something that can be resolved by just building more nursing homes,” said Takanori Fujita, author of Elderly Underclass, a book about the risk of poverty in old age that threatens even those with comfortable incomes. “What’s needed are more stable jobs with benefits, less overtime work, more childcare places and more support for women in the workplace. Society needs a complete rethink.”

Japan has 16.4 million people who are 75 or older, the age-group among which the need for medical and nursing care expands rapidly. By 2025, the number is projected to swell to 21.8 million.

The country is already saddled with waiting lists for government-subsidized nursing homes -- about 260,000 people were being cared for at home while awaiting a bed in a publicly subsidized facility as of March last year. There is also a shortage of people to look after them, partly because Japan has admitted few care workers from overseas, and the barriers to employing more remain high.

Better Pay

Noriaki Tsushima heads a group operating facilities for the elderly on the northern island of Hokkaido and serves on a panel advising Abe on ways to maintain Japan’s population and keep people in work. Tsushima proposes opening more nursing homes in urban areas that can act as hubs for the care of elderly people living in surrounding communities.

Resolving staff shortages is simple, he said: “We need to raise salaries,” Tsushima said in an interview. “If you build the facilities, but you don’t have any care workers, you won’t get anywhere.”
Nursing home workers earn an average 220,000 yen a month, compared with about 330,000 yen on average across all industries, according to the Health Ministry.

Insurance Premiums

The funds to make up the difference could be found by collecting insurance premiums that help cover the cost of nursing care from younger people, Tsushima said. The long-term care insurance system, introduced in 2000, currently requires Japanese residents to pay premiums from age 40.

Mie Waki, 44, combined her property development job with caring for her severely depressed mother for years before starting Work and Care Balance Laboratory, a business offering seminars for other carers.

The central government alone can’t solve the problem of carers leaving the labor force, she said, which is why she encourages individuals to tell their employers about their needs and to take advantage of the services offered by local municipalities. Waki not only urges carers to avoid giving up work, but tells them not to take long-term leave for fear of losing motivation.

Silent Supporters

“The central government needs to work on this, but also corporations, professional care workers and we ourselves need to make an effort,” Waki said. “There are tools, and you have to learn to use them.”
The key is to spread the know-how gained by those who are already successfully combining work and caring, she said, rather than focus only on studying those forced out of their jobs.

Takano, now 60, unmarried and estranged from his only brother, said he thought about suicide during his months living rough. While he’s back in an apartment, he dismissed the government’s chances of eliminating the “kaigo rishoku” problem.

He cited a barrage of obstacles, from the difficulty of combining long hours at work with nursing care to a lack of information about state support systems and the barriers to finding a new job in middle age, particularly for those like him who bear the stigma of a period living on welfare.

“They are talking about ‘kaigo rishoku,’ but they don’t have the systems in place to tackle it,” Takano said of government policies. “We need to create a society where people can ask for help.”

 

Number of elderly abuse cases at hands of caregivers hits record high

The Mainichi: 6 February 2016

Securing elder care environment is one of the major policy of the Abenomics. The government announced to increase the number of Senior Citizens Nursery facilities. However, Elder Care Workers at Senior Citizens Nursing Homes are put into very stressful condition while their salaries are lower than average.

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An inquiry uncovered a record high of 300 cases of abuse of elderly individuals by nursing home employees and in-home care workers in fiscal 2014, the Ministry of Health, Labor and Welfare announced on Feb. 5.

 

The figure was 35.7 percent higher than the number of cases recorded the previous year. It was the eighth year in a row following the launch of the investigation in fiscal 2006 for the highest figure to be recorded.

 

Particularly noteworthy aspects of the ministry's inquiry were the speed at which the cases were increasing -- with the figure essentially doubling during the two-year period since fiscal 2012 -- as well as the fact that 77.3 percent of those suffering the abuse were dementia patients who were living with difficulties in their day-to-day lives.

 

The investigation was based on the Elder Abuse Prevention and Caregiver Support Law that went into effect in 2006, which requires that cases of abuse be reported. It involved local governments looking into the specific reports and inquiries they had received on abuse of elderly individuals, and tallying up the cases they regarded as constituting abuse.

 

According to these figures, 10 out of a total of 691 victims faced situations of severe danger to their lives, bodies, or day-to-day living situations -- including injuries such as both thighbones being broken.

 

The reported content of the abuse (with multiple answers allowed) was as follows: 441 people (63.8 percent) suffered physical abuse, involving bodily violence or being physically restrained; 298 (43.1 percent) suffered psychological abuse, such as insulting language; and 117 (16.9 percent) suffered economic abuse, including financial embezzlement.

 

The number of reported abuse cases and inquiries received by local government offices was also the highest-ever recorded figure, at 1,120.

 

The greatest contributing factors to the abuse (with multiple answers permitted) were problems concerning education, knowledge, and/or care-related techniques on the part of caregiving employees, which manifested as a lack of understanding toward care work, at a total of 184 cases (62.6 percent). This was followed by problems of stress on the caregivers' part, and the inability to control their own emotions, at 60 cases (20.4 percent).

 

Given the extremely tough working conditions, the turnover rate of caregiving employees is exceptionally high, making it difficult to cultivate a cadre of experienced workers.

Meanwhile, abuse by immediate family members and other relatives stood at a total of 15,739 cases -- a figure that had basically remained unchanged since the previous fiscal year. There were a total of 16,156 people who suffered abuse at the hands of family, with 25 elderly individuals dying as a consequence. Forty percent of the perpetrators were identified as victims' sons, and 20 percent as their husbands.

 

The types of abuse suffered (with multiple responses allowed) were those of physical abuse at 10,805 people (66.9 percent), and psychological abuse at 6,798 (42.1 percent). The most common reason for the abuse was that of exhaustion and stress on the part of the caregiver, at 23.4 percent.

At a private elderly care facility in the city of Kawasaki's Saiwai Ward in Kanagawa Prefecture, where three elderly residents fell and died, it was found that employees had been subjecting patients to physical violence and verbal abuse.

 

Similar cases of physical and verbal violence, as well as extended periods of time in which residents were left unattended, were likewise discovered to be taking place at various facilities around the country operated by Message, the parent company that runs the Kawasaki care home.

 

Meanwhile, a questionnaire overseen by an umbrella association of elderly care home operators comprising four separate organizations, including the Japanese Association of Retirement Housing, revealed painful cries for help from people working in the elderly care profession -- a reality that many are identifying as a factor in elderly abuse carried out at the hands of care facility employees.

The umbrella association held workshops in November and December last year that were aimed at preventing elderly abuse, with 1,815 of around 2,200 participants completing the questionnaire. Among these, some 82 percent said that they believed elderly abuse was taking place in their workplace, or that it was possible.

 

"Inexperience leads to people being pushed to their emotional limits, which can become the final straw that leads to cases whereby they lash out," noted Hiroshi Nagata, the association's executive director.

 

He added, "Caring for people with dementia in particular requires a high level of skill, and is very difficult."

 

According to the health ministry, the average monthly salary in 2014 for employees at social welfare facilities was 219,700 yen -- roughly 110,000 yen lower than the average monthly salary in the field, which stands at 329,600 yen. In fiscal 2014, the job turnover rate stood at 16.5 percent.

 

A lack of employees has exacerbated long working hours, leading to exhaustion and stress for employees whose working environment is already a very strenuous one.

 

Japan economy shrinks more than expected, highlights lack of policy options

Japan economy shrinks more than expected, highlights lack of policy options
Nikkei Asian Review: 15 February 2016

At the diet session, an opposite party member referred to the pension funds investment which incurred loss under Abenomics gamble. Abe admittted that the future pension award may decrease if the loss continues. While Bank of Japan is working hard to manipulate monetary market targetting to overcome deflation, Japanese consumers are spending less for the fear of their living standard may get detriorate due to tax increasing plan, stagnant income, increasing medical expense, decreasing pension award etc.

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TOKYO (Reuters) -- Japan's economy shrank more than expected in the final quarter of last year as consumer spending and exports slumped, adding to headaches for policymakers already wary of damage the financial market rout could inflict on a fragile recovery.

Gross domestic product contracted by an annualised 1.4 percent in October-December, bigger than a market forecast for a 1.2 percent decline and matching a fall marked in the second quarter of last year, Cabinet Office data showed on Monday. It followed a revised 1.3 percent increase in the previous quarter.

 

The data underscores the challenges premier Shinzo Abe faces in dragging the world's third-largest economy out of stagnation, as exports to emerging markets fail to gain enough momentum to make up for soft domestic demand.

Market speculation of additional monetary easing simmers, although the Bank of Japan's policy ammunition appears to be dwindling, analysts say, after it deployed negative interest rates last month.
 "Private consumption is especially weak. The economy is at a standstill," said Junko Nishioka, chief economist at Sumitomo Mitsui Banking.

 "It's a matter of time before the BOJ and the government will take additional stimulus measures," she said, predicting the central bank will ease policy again as early as next month.  With his stimulus policies that gave big manufacturers windfall profits, Abe had hoped to generate a positive cycle in which companies raise wages and help boost household spending.

 Instead the data showed that private consumption, which makes up 60 percent of GDP, fell 0.8 percent, exceeding market forecasts of a 0.6 percent decline.  Economy Minister Nobuteru Ishihara told reporters after the data was issued that the economy would head for a moderate recovery as its fundamentals remained strong.  Offering some hope for policymakers, capital expenditure rose 1.4 percent, confounding market expectations for a 0.2 percent decrease.

But analysts doubt whether the economy will gain momentum in coming months, with the recent market turbulence and slowing Chinese growth clouding the outlook for corporate profits.   Exports fell 0.9 percent in October-December after rising 2.6 percent in the previous quarter, underscoring the pinch companies are already feeling from soft emerging market demand.

 

 Domestic demand shaved 0.5 percentage point off GDP growth, while external demand -- or net exports -- added just 0.1 point. Last month the BOJ unexpectedly cut a benchmark interest rate below zero, stunning investors with another bold move to stimulate the economy as volatile markets threatened its efforts to overcome deflation.

 But the shock move has failed to boost Tokyo stock prices or weaken the yen as Japanese markets remained at the mercy of a global equity sell-off, bolstering a view among investors that the BOJ is running out of policy options. 

Abe hints at cutting pension benefits due to stock market downturn

Japan Press Weekly:  10 and 16 February 2016

Prime Minister Abe Shinzo has made clear his recognition that losses from investments of pension funds in stocks could bring about cuts in pension benefits provided by the government to pensioners.

This means that pension premium payers may pay for the loss of about eight trillion yen the Government Pension Investment Fund (GPIF) posted in its domestic/foreign stock holdings.

At a House of Representatives Budget Committee session held on February 15, Abe said, “Government payments of pension benefits will be naturally affected if the GPIF’s stock trading does not generate a profit as expected,” adding, “There is no option but to adjust pension benefits payments.”

The Abe administration in October 2014 drastically increased the volume of the GPIF’s “risk assets” as a growth strategy by asserting that it “will contribute to investments leading to growth”, and then allowed the world’s largest fund to use 87 trillion yen of its 130 trillion yen in assets for equity investments.

As a result, directly hit by the decrease in stock prices, the GPIF had a loss of 7.9 trillion yen in the July-September quarter of 2015. The strategy promoted by Abe to maintain high stock values turned out to be a huge failure.

The Abe regime must be held responsible for the expansion of risky investments. Even now, many pensioners have to live on an already small amount in pension benefits. It is unacceptable for the government to risk public pension reserve funds any further.

600 million yen donation to LDP turns into 3 billion yen tax cut

600 million yen donation to LDP turns into 3 billion yen tax cut

Japan Press Weekly:  26 October 2015

 

Akahata on October 26 revealed that six major automakers and the three largest steelmakers have received three billion yen in corporate tax breaks in return for 600 million yen in donations to the ruling Liberal Democratic Party during the past three years.
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The Industrial Revitalization Law that provides large companies with tax ...breaks was enacted in October 1999, endorsed by the LDP, the Liberal Party, the Komei Party, and later the Democratic Party of Japan. Between October 1999 and July 2003, 217 companies saved 81 billion yen through corporate tax breaks in exchange for their plans to cut their number of employees by 90,000. This was a 900,000 yen tax cut per employee, and these corporations were then able to donate more to the LDP.
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Under the Industrial Revitalization Law, suggested by business circles in the first place, if a company's restructuring plan meets the government's standards, this company becomes eligible to receive tax breaks. The business community donates vast amounts of money every year to press political parties, except for the Japanese Communist Party, to promote legislation in favor of the business world. The Industrial Revitalization Law is a typical example of this.
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The JCP has consistently opposed the system of using tax money to encourage corporate restructuring

company	Plans to cut workforce	Received in tax breaks	Donated to the LDP
Mitsubishi Motors Corporation	4096	609 million yen	44 million yen
Toyota Motor Corporation	3259	355 million yen	194.2 million yen
Mazda Motor Corporation	1199	353 million yen	55.2 million yen
Hino Motors, Ltd.	1060	333 million yen	35.37 million yen
Fuji Heavy Industrial Ltd.	1318	310 million yen	55.35 million yen
Suzuki Motor Corporation	873	178 million yen	67.82 million yen
JFE (Kawasaki Steel Corporation and NKK Corporation merged in Sep. 2002)	3295	578 million yen	82.6 million yen
Sumitomo Metal Industries, Ltd.	1945	246 million yen	41.3 million yen
Kobe Steel, Ltd.	692	17 million yen	31.3 million yen
Total	17737	2979 million yen	607.14 million yen

http://www.japan-press.co.jp/2003/2356/600.html
 

Japan’s Pension War: Abenomics Confronts GPIF

Japan’s Pension War: Abenomics Confronts GPIF
Bloomberg:  1 December 2015

It’s a mountain of money the size of Mexico’s economy. It could buy Apple and Exxon Mobil and still have change. Japan’s Government Pension Investment Fund is the world’s biggest state investor — trumping all managed government retirement and sovereign wealth funds — and the way it spends its staggering $1.1 trillion can roil global markets.  Japan’s leaders wanted the bureaucrats who managed its sleepy strategy to plow more money into risky investments, aiming to stimulate the economy and finance pensions in the world’s most rapidly aging society. Opponents accused them of favoring the stock market and their own approval ratings over pension security.

The Situation

GPIF is buying more local and foreign stocks as part of a year-long strategy revamp that was largely complete by October 2015. The next phase of its diversification will include emerging-market debt and junk bonds. Before the shift, half of the fund was invested in Japanese bonds, mainly government debt paying one of the lowest sovereign yields on the planet. The government has pushed the fund to broaden assets, hire proper investment professionals and use its might to impel companies to increase profits. It’s one front in Prime Minister Shinzo Abe’s drive known as Abenomics to spur inflation and jolt Japan out of its two-decade-long economic slump. Higher consumer prices are expected to erode the spending power of the measly payments from the country’s bonds. Add Japan’s demographic predicament — a shrinking population and a record number of people over 65 — and it’s clear that the fund had to change. Global investors took note: The redirection of GPIF’s assets was expected to pump an estimated $181 billion into global markets. Early results of the shift in strategy underlined the greater risk: GPIF posted its biggest quarterly loss since at least 2008 amid a rout in global equities.  Fund officials said the $64 billion loss in the three months through September 2015 reflected “short-term market moves.”

The Background

GPIF invests for the two main state retirement systems, covering most pension savers in Japan. The fund pays more to retirees than it receives in contributions, and its returns have lagged peers with more aggressive strategies. It earned an average of 2.8 percent in the nine years through March 2013. That compared with 5.2 percent for Norway’s Government Pension Fund Global and 7.3 percent for the California Public Employees’ Retirement System, or Calpers, the biggest managed U.S. fund. Norway is also trying to boost returns on its $860 billion hoard, which is fed by the country’s oil riches and is the biggest sovereign wealth fund. The $2.8 trillion U.S. Social Security Trust Fund has twice the assets of GPIF, though it isn’t actively managed and invests only in U.S. Treasuries. In 2005, President George W. Bush proposed a partial privatization of the fund to keep it solvent and was quickly shot down. Had it gone through, U.S. retirees would have had much more at stake when the 2008 financial crisis sent stocks tumbling.

The Argument

GPIF’s managers argue that the fund’s sole responsibility is to Japan’s past and present workers and that it must not stray from its central mission. Returns have beaten growth in wages, which haven’t risen more than 1 percent annually since 1997. Takahiro Mitani, GPIF’s president, insisted before the strategy change that inflation isn’t the threat some think it is. The fund shouldn’t be hijacked by politicians to reignite a stalled rally in the nation’s stocks, he said. Lawmakers’ plans for GPIF are part of a broader drive to reshape Japan. With the return on equity of Japanese companies stuck below the global average, the government created a stewardship code to encourage the country’s hitherto silent institutions to press companies they own to improve. Tokyo’s stock exchange established a corporate governance code and introduced an index of companies that reward shareholders well, partly to guide GPIF on what to buy. The fund’s managers have been taking small steps on the road to reform, like removing a cap on salaries for investment experts and hiring an activist fund to help with stock management.

 

 

Japan's Pension Whale Stands by Stocks After $64 Billion Loss

Japan's Pension Whale Stands by Stocks After $64 Billion Loss
Bloomberg Business: 30 November 2015

Japan’s giant pension manager is unrepentant after a push into equities saw the fund post its worst quarterly result since at least 2008.

There’s no reason to doubt the 135.1 trillion yen ($1.1 trillion) Government Pension Investment Fund’s investment strategy, officials said on Monday in Tokyo as they unveiled a 7.9 trillion yen loss for the three months through September. The slump was GPIF’s first negative return after revamping allocations last October, when it doubled holdings of Japanese and foreign shares.

The loss will test the resolve of the fund’s stewards and of Prime Minister Shinzo Abe, who called for the shift out of bonds to riskier assets such as equities as the government tries to spur inflation. Sumitomo Mitsui Trust Bank Ltd. and Saison Asset Management Co. say that while the public may question the safety of their pension savings, GPIF should be judged on how it meets the retirement needs of the world’s oldest population over a longer horizon.

“They will see some criticism for this. But that’s more of an issue of financial literacy," said Ayako Sera, a market strategist at Sumitomo Mitsui Trust in Tokyo. “The liabilities of public pensions have an extremely long duration, so it’s best not to carve it up into three-month periods. However, from a long-term perspective, it’s necessary to continue monitoring whether the timing of last year’s allocation was good or not.”


The fund shifted the bulk of its holdings at a “terrible" time, just as stocks peaked, Sera said.
GPIF lost 5.6 percent last quarter as China’s yuan devaluation and concern about the potential impact if the Federal Reserve raises interest rates roiled global equity markets. That’s the biggest drop in comparable data starting from April 2008. The pension manager’s Japan equity investments slid 13 percent, the same retreat posted by the Topix index, and foreign stock holdings fell 11 percent. The fund lost 241 billion yen on overseas debt, while Japanese bonds handed it a 302 billion yen gain.
GPIF is likely to have purchased 400 billion yen of Japanese stocks and 1.7 trillion yen in foreign equities during the July-September quarter after its exposure to the asset class declined following the rout, according to Nomura Holdings Inc.

Equity Rebound

Things are looking up. The Topix rallied 14 percent since the start of the fourth quarter, while a gauge of global shares gained about 7.1 percent. As of Sept. 30, GPIF had 43 percent of its assets in equities around the world.

The asset manager “seriously considered" whether to continue with its current investment mix before deciding it’s the right approach, Hiroyuki Mitsuishi, a GPIF councilor, said on Monday. Short-term returns are more volatile these days, but there’s less risk that GPIF will fail on its long-term objective of covering pension payouts, he said. Fund executives have argued that holding more shares and foreign assets will lead to higher returns as Abe’s inflation push risks eroding the purchasing power of bonds.

“Short-term market moves lead to gains and losses, but over the 14 years since we started investing, the overall trend is upwards,” Mitsuishi said. “Don’t evaluate the results over the short term, as looking over the long term is important.”

Currency Loss

A stronger yen contributed to GPIF’s quarterly loss, with the currency gaining 2.2 percent against the U.S. dollar in the quarter.

GPIF has started to hedge some of its investments against fluctuations in the euro, which it sees declining in the short term on expectations for further central bank easing, the Wall Street Journal reported Tuesday. The fund is in a position to use hedges at any time, Mitsuishi said in response to the report, while declining to comment on whether it had.

GPIF hadn’t posted a quarterly loss since the three months through March 2014. The most recent results included returns from a portfolio of government bonds issued to finance a fiscal investment and loan program, with GPIF providing such figures since 2008. If those are stripped out, the drop was the fund’s third-worst on record, exceeded only by declines in the depths of the 2008 global financial crisis and the aftermath of the Sept. 11, 2001 terror attacks.

“They changed their portfolio knowing something like this could happen, and they’re not going to change their investment policy because of this,” said Tomohisa Fujiki, the head of interest-rate strategy for Japan at BNP Paribas SA in Tokyo. “They reduced domestic bonds and increased risk assets such as stocks, so temporary losses can’t be helped when there’s chaos in the market like in August and September."

Public Relations

For Tetsuo Seshimo, a fund manager at Saison Asset Management in Tokyo, GPIF gets a pass on its performance given it was in line with benchmark indexes, and a failing grade on its public-relations strategy.

“If you have half your portfolio in stocks, this kind of thing can easily happen," he said. “However, the public will probably be surprised. The issue is whether they have explained this properly -- they haven’t.”

GPIF knows it needs to convince the public that it’s doing the right thing. It unveiled a new YouTube channel on Monday, which will have videos of its press conferences.
“People are probably very interested in GPIF’s results,” said Mitsuishi. “We want to directly explain to them that a long-term view is important.”

http://www.bloomberg.com/news/articles/2015-11-30/japan-s-pension-whale-stands-by-stocks-after-64-billion-loss

 

Crash-Testing Abenomics

Crash-Testing Abenomics
ValueWalk: 14 January 2016

We remain convinced that Japanese risk assets—equities and real estate—are on track for a multi-year bull market. Our conviction is based on two essential pillars. The first one is our view that Japan’s private sector has begun to focus on capital efficiency as a principal driver of corporate strategic focus. The second one is that Japanese policy makers are relentlessly focused on ending deflation and creating a pro-growth domestic macro-economic backdrop. Both pillars remain firmly in place, and we expect a decisive and united policy response from “Team Abe” to the deflationary threat posed by current global and domestic developments. The Bank of Japan (BOJ) is back in play to ease on January 28/29.

While Japan’s corporate governance revolution is unlikely to be derailed by the current pullback in global markets, the current threat to Abenomics is very significant, in our view. Personally, I think Abenomics is now facing the most challenging “crash test” since its inception three years ago, because any national growth agenda is ultimately only as good as its success in building endogenous domestic forces strong enough to withstand a global deflationary shock.

Rising Deflation Risks

The current “crash test” consists of two major hurdles: economics and portfolio.
The economics is straightforward. It is the compounding deflationary pull from:

• Falling global demand in general, China in particular; • Imported deflation from both yen strength and falling commodity prices; and
  • Domestic demand deflation forced by the negative wealth effect from falling asset prices. Note here that on January 12 TOPIX was down 17.7% from its August 2015 peak, while the S&P 500 was down “only” 9.9% from its May 2015 peak.

While it is difficult to model the exact impact of these compounding deflationary forces on Japan’s inflation and growth outlook, sensitivity analysis suggests that the 5% appreciation of the yen and the fall in commodity prices alone have the power to push the Consumer Price Index (CPI) back into outright deflation (last reading of the national CPI was +0.3% year-over-year). It goes without saying that these are just the immediate first-round effects. Sustained global deflation momentum and yen appreciation would, before long, begin to cut into domestic employment and business investment plans. Clearly, downside risks to achieving any inflation target are rising.

Rising Portfolio Risks—Negative Returns for Abenomics Portfolio This Fiscal Year

  

The portfolio risks are even more significant, in my view. This is because the entire portfolio reallocation agenda of Abenomics—cut domestic bonds, raise domestic equities and non-yen exposure—is being undermined. Specifically, yen equities are now down 9.1% since the start of the Japanese fiscal year (April 1, 2015); in other words, we are on track for the first negative fiscal year for yen equities since 2011. It would also be the first year of yen appreciation since fiscal 2011. And to add insult to injury, the negative returns of risk assets is offset by a sharp rally in the perceived “risk-free” Japanese government bonds (JGBs), with 10-year yields falling from 40 basis points (bps) at the start of the fiscal year to 23 bps on January 12.

Asset Performance from a Japanese Perspective—Negative Abenomics Portfolio This Fiscal Year?



The message is loud and clear: Portfolio rebalancing has been a key part the Abenomics strategy, with the BOJ, the Government Pension Investment Fund (GPIF) and Japan Post all advocating and implementing significant increases in risk assets to “lead by example” and for private asset managers and retail investors to follow suit. If these new “national model portfolios” do indeed show negative returns in the current fiscal year—which concludes March 31, 2016—there are bound to be significant negative repercussions. After all, Team Abe has often insisted that the transmission of a new virtuous cycle from portfolio rebalancing into the real economy, fiscal sustainability, corporate innovation and positive wealth for consumers remains at the core of why Abenomics will work. Failure to perform risks incurring the wrath of critics from both the conservative side and the opposition.

Policy Response Coming—BOJ in Focus on January 28/29
In short, the current threat to Abenomics is very real, in our view. The good news is that Team Abe is not complacent. A strong and unified reflation policy response is likely to come soon. A key focus falls on the BOJ. We had originally expected added easing to come at the March 14 or the April 27 policy board meeting; but given the growing sense of urgency forced by the combination of accelerating global and domestic deflation risks and growing pressure on Team Abe to renew its pro-growth credentials, added BOJ stimulus is now in the cards for as early as the January 28/29 meeting. Indeed, assuming global and domestic asset price volatility remains high, failure to act decisively and proactively now could severely endanger Team Abe’s pro-growth credibility, in our view.

Important Risks Related to this Article

Investments focused in Japan increase the impact of events and developments associated with the region, which can adversely affect performance.







 

Sympathy budget’: Japan’s extraordinary generosity to US forces

Sympathy budget’: Japan’s extraordinary generosity to US forces
Japan Press Weekly: 22 December 2010

The Democratic Party of Japan-led government announced on December 14 2010 that it agreed with the U.S. government to conclude a new special agreement in order to maintain about 190 billion yen in the annual “sympathy budget” for the stationing of the U.S. forces in Japan. The agreement will be signed in January and be effective for five years. Under the new arrangement, a total of nearly one trillion yen of Japanese citizens’ tax money will be poured into the coffers of the U.S. military in Japan. This article points out how absurdly generous the Japanese government is to U.S. servicemen with the use of the “sympathy budget.”

 

Facility maintenance fees

From FY 1979 to FY 2010, about 2.17 trillion yen has been used to build 12,900 facilities for the U.S. forces, covering everything and anything from military installations such as blast-proof shelters for fighter jets and berths for a nuclear-powered aircraft carrier to housing, schools, and hospitals.

The number of housing units built for U.S. personnel totaled 11,383, costing 551 billion yen. Even the smallest units measure 101 square meters (two-bedroom condominium). The largest ones are 234 square-meter houses for commanders with four bedrooms.

In NATO countries, housing units for U.S. servicemen and their families are excluded from facilities that host nations are required to build. Japan stands out with its “sympathy” for the comfort of U.S. forces.

It is also surprising to see the well-equipped schools for children on U.S. bases. For instance, the “Ryukyu Middle School” was built in 2008 within the U.S. Kadena base of Okinawa for about 600 students. Spending 4 billion yen for construction, it has a 400-meter track field, basketball court, soccer field, and softball field.

The construction cost was more than twice the amount for building a public middle school for 600 students (1.64 billion yen). Even Okinawan Governor Nakaima admitted, “Their facilities are too fancy. Comparing them with public schools in the prefecture, I have a strong feeling of uneasiness” (in the plenary session of the prefectural assembly on September 30, 2008).

Labor costs include wages for bartenders and animal caretakers

Japanese employees at U.S bases are assigned to jobs serving U.S. military personnel, for example, as bartenders, golf course managers, pleasure craft operators, and animal caretakers.

The Kan administration agreed with the U.S. administrators to reduce personnel costs by cutting 430 jobs affecting about10 percent of Japanese workers at leisure facilities, including bars and golf courses, within the bases. As of the end of 2006, a total of 5,568 Japanese work in the recreation facilities on the U.S. bases (Mainichi Shimbun, March 14, 2008).

Japan pays for U.S. military households’ utility bills

The special Japan-U.S. agreement on the “sympathy budget” states that the Japanese government is required to cover the cost of utilities for official uses only. However, Japan also pays the utilities costs for U.S. households on the U.S. bases.

At a House of Councilors Foreign Affairs and Defense Committee meeting on March 15, 2000, then Japanese Communist Party Dietmember Tachiki Hiroshi revealed that at a U.S. forces housing complex at the Ikego district of Kanagawa Prefecture, expenses for utilities per house amounted to 600,000 yen a year.

Only Japan pays for training relocation

Since the night landing practice (NLP) at the U.S. Atsugi Base in Kanagawa Prefecture was relocated to the distant island of Iwo-jima, the Japanese government has paid the cost for flights of carrier-borne aircraft, the transport of military personnel and goods, provision of food, and maintenance of accommodations. At a House of Representatives Foreign Affairs Committee meeting on March 26, 2008, Director-General of the North American Affairs Bureau of the Foreign Ministry Nishimiya Shin’ichi admitted, “There is no other nation paying training relocation costs for U.S. forces.”

8.8 million yen in tax money per U.S. soldier used

The amount that Japan pays as host nation support for the United States is larger than that of all other 26 U.S. allies combined. This was revealed in a U.S. government report.

“The 2004 Allied Contributions to the Common Defense (U.S. Department of Defense)” compared the contributions of 27 allied nations, including Japan.

The report showed that Japan paid the largest amount (4.41134 billion dollars or about 366 billion yen) for the stationing of U.S. forces. This was twice the amount paid by Germany, which ranked second, and 1.8 times the total amount paid by 18 member states of NATO, accounting for 53 percent of the total amount of support paid by 27 allied nations. The Japanese government used about 8.8 million yen (106,000 dollars) in tax money per U.S. soldier to cover the cost of stationing the U.S. forces in Japan.

The Japanese government shares 75 percent of the cost for the stationing of U.S. troops in Japan by generously using people’s tax money. In this regard as well, Japan ranked at the top among 27 allied nations.

Abe government gives in to US demand for increase in ‘sympathy budget’

Abe government gives in to US demand for increase in ‘sympathy budget’

Japan Press Weekly: 17 December 2015

 

The Japanese government on December 16 reached an agreement with the U.S. government, promising to provide the U.S. military in Japan with a total of 947 billion yen in the form of a “sympathy budget” over a five-year period starting in 2016, up by 13 billion yen from the previous period.

Tokyo initially insisted that the amount of the “sympathy budget” should be reduced on the grounds that Japan introduced the new security legislation enabling the Japanese Self-Defense Forces to go overseas to help the U.S. in its military activities and that Japan shoulders a heavy financial burden regarding the construction of a new U.S. base in Okinawa. Washington, however, demanded an increase in the budget to support the stationing of the U.S. forces in Japan, and Tokyo gave in to the demand.

The framework of the “sympathy budget” was established in 1978 when the Japanese government started to pay a substantial part of costs for employees in U.S. military bases in Japan although the Japan-U.S. Security Treaty does not oblige Japan to do so. This scheme has expanded its coverage to include costs for constructing entertainment facilities and housing for military personnel, cost for utilities on bases, and other spending. The annual amount of the “sympathy budget” increased from 6.2 billion yen in 1978 to nearly 300 billion yen in the late 1990s.

The “sympathy budget” once tapered off after 2000, but the Japanese government instead began to pour a large amount of taxpayers’ money into the U.S. project to realign its military facilities in Japan, which includes the relocation of the U.S. Futenma base to the Henoko coastal area within Okinawa. The total amount of Tokyo’s funding to the U.S. military now exceeds 700 billion yen a year. No other U.S. ally offers such a huge amount of financial support to the U.S. military.

The Abe government introduced the war legislation in defiance of strong public opposition and is pushing forward with the construction of the Henoko base despite growing protests in Okinawa and the rest of the country. In addition, Prime Minister Abe Shinzo has accepted U.S. request to increase the amount of the “sympathy budget”. This clearly underlines the fact that PM Abe gives priority to U.S. demands over Japanese people’s demands.

 

http://www.japan-press.co.jp/modules/news/index.php?id=8812#.Vpebkm_rktc.facebook

 

Meanwhile, Japanese government is going to cut the aid to internal refugees of nuclear power plant accidnet caused by earthquake 4 years ago.
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Four years since that triple disaster struck the Tohoku region of northern Japan, there are still more than 220,000 refugees from the area scattered over the country......The Japanese government has given (these refugees) free housing for four years, but that’s supposed to end next March.

 

Critics assail Abe after middle-class income gaffe highlights wealthy upbringing

Critics assail Abe after middle-class income gaffe highlights wealthy upbringing
The Japan Times:  9 January 2016

3 years after Abenomics (economic recovery plan of Abe government) got initiated, even Takenaka (the scholor and economic advisor of the LDP government) started to admit its failure in terms of increasing inequality of income distribution. Observing from outside Japan, it looked successful because Japanese stock prices got recovered. The government expressed that unemployment rate decreased. But i...n reality, the number of permanent staffs with stable income has decreased while that of part time workers (lower paid, insecure position) has increased. While big businesses enjoy increasing profit by Abenomics, total amount of labour costs of past 3 decades either remained same or decreased. The amount of internal reserves of large corporations in Japan has reached all-time high record, the Japan Research Institute of Labor Movement (Rodo-soken) revealed recently.
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The below article from Japan Times describes the recent Diet session related to this matter.

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Prime Minister Shinzo Abe, who hails from a wealthy political dynasty, has drawn public criticism over a gaffe he made in the Diet Friday, which was quickly pounced on as evidence by some that he lacks real knowledge about the plight of the middle class.
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During a Lower House Budget Committee meeting, Abe attempted to explain why average real wages, or workers’ price-adjusted earnings, have declined since he took office in December 2012. In his explanation, he cited “the Abes,” an imaginary family where the husband earns ¥500,000 a month and the wife, who recently began a part-time job, makes ¥250,000.
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The outcry over the figures was almost immediate on social networking services, with numerous users bashing Abe and calling such salaries unthinkably high — particularly for part-timers. According to the latest monthly survey by the labor ministry, the average monthly wage for a part-time worker, including nonregular extra payments, was a mere ¥96,638 at a company with five workers or more in November. The figure is just 38.7 percent of the wage Abe cited for a part-timer.
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For a full-time worker, the average monthly wage was ¥352,094, again far lower than the ¥500,000 salary for the husband Abe cited. “¥250,000 a month for a part-timer? Impossible. (I earn) ¥150,000 working six days a week with no breaks and with overtime work. In addition, social security (premiums) are taken away from that,” Twitter user @van_jin wrote Saturday.
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The furor over Abe’s comments at the Diet drowned out his larger point — that if a housewife starts working a part-time job with a salary lower than that of her husband, the average wage per worker will decrease although the family’s total income will rise. “When the economy recovers and jobs increase, it’s possible the average wage per worker will become lower because more people start working part-time jobs,” Abe said.
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“If I earn ¥500,000 and my wife earns ¥250,000, (the total family income) is ¥750,000. But the average will be lower because two people are now working,” he said. Still, if the furious reaction online is any indication, many believe that Abe, the grandson of former Prime Minister Nobusuke Kishi, simply does not know how much money an average family makes since he was raised in a privileged, elite environment.
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“He is out of touch with the realities of the common people. Maybe you can’t ask too much from a hereditary politician who was born with a sliver spoon in his mouth,” said Twitter user Yoshihiro Kagoshima, who tweeted from his @kgssazen account on Saturday.

Note:  Last year end, Abe had a party hosting journalists and enjoyed luxury meals at the cost of our tax. On the other hand, Taro Yamamoto, a cabinet member from the opposite party, assisted NGO which fed homeless people.
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Japan is one of the world's richest countries but one in six Japanese children now live in poverty - one of the worst rates in the industrialised world.

Japan's high child poverty rate driven by an increasing number of single-parent families
ABC News:  1 March 2015

Japanese government is planning to raise consumption tax but to cut corporate tax. Also, the government is cutting various social welfare budget while increasing defense budget and sympathy budget for US military bases in Japan.
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 The gap between rich and poor is widening in Japan. Notably, sixteen percent of Japanese minors live below the poverty line, or about 1 out of every 6 children. Those figures put Japan at No. 10 among the 34 member countries of the Organization for Economic Co-operation and Development in terms of the rate of child poverty.
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 In this October, the government had set up “Child Poverty relief funds” asking for the DONATION BY PRIVATE SECTOR to ease this problem. By the end of November, only 3 million Yen (about USD25,000.00) was contributed and NO DONATION WAS GIVEN FROM BUSINESS. Behind the scene, LDP (leading party of the government) remains to be the major beneficiary of political donations from big business.
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Poverty is largely hidden in Japan as most go without help for it is seen as a great shame, but the issue is now threatening the country's economic revival.

Nana Kojima is a single mother bringing up two children and is part of Japan's hidden but growing army of working poor.

"I struggle with the rent. Half my income goes on that and then I don't have much left for food and bills," Ms Kojima said.

In Japan more than half a million single mothers live below the poverty line, earning less than $12,000 a year.

Ms Kojima worries that she will not be able to give her children the opportunities needed to lift them out of poverty.

For the moment she has free child care, but that finishes when her son starts school next year.
"There [are] going to be limits on their education. I don't have the money," she said.
"It will be difficult to provide what they need."

Ms Kojima does not receive any child support from her former husband, which is the case for 80 per cent of single mothers.

Japan's male corporate culture means single mothers mostly work in casual, low-paid jobs.
Ms Kojima works as a waitress for $10 an hour.

 

"In Japan, single, working mothers are discriminated against," she said.
"We have little chance to progress as our needs are not understood."

 

The increase in the number of single mothers is fuelling Japan's record child poverty rates.
Community groups are starting to provide help, including volunteers dedicated to making sure children in need get a healthy meal and their mothers have a chance to connect.

The Children's Network group in Tokyo was one of the first to be set up in the Japanese capital just two years ago and it has encouraged more to be established.

"The mothers can become isolated and have a hard time raising kids," director Chieko Kuribayashi said.

"It's not just about money. We have to create connections to communities so together we can solve the problems."

Ms Kuribayashi says the organisation is just waiting for the government to do its part.
"The government has to set up a proper system to help educate these kids," Ms Kuribayashi said.
"As the children get older, they have to break the poverty cycle and education is the key." 

 

http://www.abc.net.au/news/2015-03-01/japan-high-child-poverty-rate-driven-by-single-parent-families/6272428