FY 2007 budget will increase poverty and social disparity

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FY 2007 budget will increase poverty and social disparity
Akahata editorial (excerpts)

The Abe Cabinet has adopted the draft FY 2007 budget that prioritizes tax cuts for large corporations and the wealthy with the catchphrase: "Without economic growth, Japan has no future."

The government has acknowledged that the Japanese economy is in a recovery phase that is the longest since the end of the Wars. However, the most outstanding feature is that the nominal wage has dropped for the first time in the postwar economic recovery phases.

In December, 2006, the Cabinet Office published an economic white book entitled "Japanese Economy 2006-2007" which stated that while maintaining the decrease in the labor share, corporations as a whole have ensured profitability by restraining the wage increase rate.

This report acknowledges that the increase in the ratio of non-regular work to employment as a whole has contributed to the decrease in the labor share and wages. The report pointed out that corporations are planning to increase non-regular employment and that the labor share is declining, particularly in large- and medium-sized enterprises.

By relaxing employment regulations on temporary workers, successive Liberal Democratic Party governments have assisted and even promoted the large corporations' practice of making immediate profits by compressing labor costs. This policy has helped to increase the number of "working poor" who receive income below the level of livelihood protection benefits no matter how hard they may work and increase the illegal corporate practice of "disguised contract work."

The increase in the poverty and the degree of social disparity in fact obstructs a stable development of the Japanese economy.

Family expenditure, which comprises the greatest component of the gross domestic product, holds the key to a sustainable and stable growth of the Japanese economy.

Abe's policy of cutting taxes on large corporations and the wealthy while imposing heavier taxes on the public and cutting welfare services is completely wrong. Worse still, the Abe Cabinet is planning to push ahead with further relaxation of regulations on temporary employment, including legitimizing the practice of disguised contract work, and an adverse revision of the Labor Standards Law to aggravate the situation of unpaid overtime and long working hours.

Abe's policy will bring about an increase in social disparity and poverty, thus harming the household economy.
- Akahata, December 25, 2006