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OECD report shows Koizumi's 'structural reform' has increased social disparity
Akahata editorial (excerpts)

The Organization for Economic Cooperation and Development (OECD) released on July 20 its economic survey on Japan, which devoted for the first time an entire chapter to inequality in Japan.

The report pointed out that the trend toward greater income inequality was already evident in the second half of the 1980s, and that the rate of relative poverty in Japan is "now one of the highest in the OECD."

The Japanese Communist Party that works for resolution of the serious contradictions caused by the "structural reform" policy takes a different position from that of the OECD which promotes the "structural reform." Both, however, share the same view on the situation in Japan, sensitively recognizing the seriousness in the increases in poverty and inequality.

According to an international comparison of the relative poverty rate of the working-age population made in the report, Japan already ranked second, next to the United States, among the developed countries in 2000.

The Koizumi cabinet has forcibly carried out employment deregulations in order to fully meet the business circles' selfish demands for reduction in labor costs by replacing regular-workers with non-regular workers.

It is implementing the law of the jungle to shift burdens onto workers and young people, running counter to reducing poverty and inequality, tasks that a government is supposed to carry out. Poverty and social disparity has increased greatly since 2000.

The Japanese government reportedly argued that the main factor contributing to the increase of inequality is the change in the population composition caused by aging.

Rebuffing this, the OECD report explicitly stated, "The key factor appears to be increasing dualism in the labor market" while population aging is "partly responsible for boosting inequality."

The report refers to the fact that the proportion of non-regular workers has risen to over 30 percent, up more than 10 percent points in the decade and that part-time workers earn on average only 40 percent as much per hour as full-time workers.

It warned that economic recovery will turn only a portion of non-regular workers into regular workers and that "there is a risk that labor market dualism will become entrenched."

Taking a defiant attitude by saying that an increase in the social disparity has not been confirmed and that disparity in itself is not bad, the Koizumi cabinet has insisted that economic recovery will solve the question. Not only in Japan but internationally, it is now clearer than ever that such an argument is groundless.

The OECD report also showed that Japan ranked the lowest in terms of the reduction in the poverty rate by income redistribution that includes taxation and social welfare. This indicates that the weakened function of income redistribution has contributed to make Japan the country with the greatest disparity within the OECD.

The Koizumi Cabinet has implemented tax breaks for large corporations and wealthy people and imposed tax hikes and shifted heavier burdens in social welfare onto the general public.

It is necessary to drastically change the Koizumi "structural reform" policy. However, the Koizumi cabinet and the Liberal Democratic Party, Komei Party and the Democratic Party of Japan are calling for increasing the rate of consumption tax which is the worst type of regressive taxation, contributing only to an increase in poverty and social disparity.
- Akahata, July 26, 2006

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