Is help really on way for the working poor?

As Japanese society becomes more polarized between successes and failures, the widening income disparity is threatening to become permanent.

Weleare recipient Kazufumi Kinjo talks about how working hard did not pull him out of poverty, during an interview in Tokyo's Toshima Ward on March 30. KAHO SHIMIZU PHOTO

And those trapped in the lower tier are finding it harder to climb out, despite working hard, giving rise to a growing number of "working poor" -- a term generally used to describe individuals and families whose annual incomes fall below 2 million yen.

According to economist Takashi Kadokura, president of BRICs Research Institute, the number of working poor rose 11.7 percent over the past four years to about 5.46 million people in 2005.

The figure includes female part-timers whose husbands work full time. But Kadokura, who recently authored a book about the working poor, feels the real problem is the increase in male working poor -- who numbered about 2.176 million in 2005, up from 1.836 million in 2001 -- because men are the traditional breadwinners in the family.

Prime Minister Shinzo Abe's government has vowed to remedy the income disparity, but is also seeking to curb welfare payments, and already special benefits for single mothers and the elderly are on the chopping block, prompting doubts about the prospects for improvement.

One such member of the working poor, Kazufumi Kinjo, 36, struggled in vain to get out of poverty. He went on welfare last year after an injury left him unable to work.

Despite doing hard day labor at construction sites, Kinjo's monthly pay averaged only about 70,000 yen last year.

"I didn't have time to think about anything," he said. "I barely managed to survive from one day to the next."

Kinjo suffered a hernia five years ago and was forced to cut back on work, becoming homeless in the process. He slept in "manga" (cartoon) cafes -- that cost him 980 yen per night -- in Tokyo's Shinjuku Ward.

Kinjo moved to Tokyo from Amami-Oshima Island in Kagoshima Prefecture about 20 years ago after dropping out of high school. Due to his poor educational background, he only managed to land sporadic, low-paying jobs, mostly doing heavy labor at construction sites.

"I worked day and night . . . sometimes even in the snow, " he said. "I curtailed my living expenses as much as possible. I spent less than 200 yen for a meal, but still, I found myself running short of money," Kinjo said, adding his feeling of hopelessness about his future turned to depression.

Living on welfare, he is now having his hernia and depression treated so he can get back to work.

"I thought if I worked hard, I would be given a chance someday, but I was wrong," Kinjo said.

Facing mounting criticism for failing to act to reduce wage inequalities, the government submitted bills to the Diet in mid-March to help low-wage workers.

One bill would revise the Minimum Wages Law, the first revision in 39 years, in the hope of raising the incomes of the working poor above bread-line levels. Another bill, to revise the Employment Measure Law, is meant to encourage employers to hire young, unskilled temporary workers as regular employees and give them training.

Although the government claims the revisions are designed to give low-wage workers better pay and improve their overall lot in life, unions warn that the changes may have little effect, because they are nonbinding and also because the state is trying to reduce welfare payments.

"Why are there people who can't get out of poverty no matter how hard they work? Because they work for very little pay. The problem is that low wages are legally allowed," said Keiichi Ito of the National Confederation of Trade Unions (Zenroren).

Minimum wage levels, which cover all types of work, vary by region and are determined yearly by local-level labor offices.

In fiscal 2006, Tokyo had the highest minimum wage -- 719 yen an hour. Okinawa, Akita, Iwate and Aomori prefectures were at the lower end of the spectrum, with an hourly labor rate of 610 yen.

"Even if you work full-time for 2,000 hours a year, you'll only make 1.3 million yen to 1.4 million yen, which is not enough to make a living," Ito said.

This would make some low-wage workers earn less than the amount people on welfare receive. For example, the monthly minimum wage is about 126,500 yen in Tokyo. But a single person there aged between 18 and 19 can get more than 140,000 yen in a single monthly welfare payment.

The government thus wants this disparity to end and wages to be above welfare.

Japan's minimum wages, 673 yen an hour on average, are well below that of other major industrialized nations. The average in Britain is more than 1,200 yen, and in France it's roughly 1,300 yen.

Some employers in Japan don't even pay minimum wage. Thus another change the government is seeking is to stiffen the penalty for employers who cheat their workers to 500,000 yen per employee, from the current 20,000 yen.

But Zenroren's Ito warned minimum wages will not rise if the government proceeds with plans to reduce welfare payouts to ease its budgetary crisis.

"We have to carefully monitor whether the revision to the law will truly result in raising wages to ensure a basic level of subsistence," he said.

Over the past decade, the number of households on welfare surged 75 percent to a record 1.07 million as of 2006, according to the Health, Labor and Welfare Ministry, adding to the central and municipal governments' fiscal burden.

In its economic reform plan approved last July, the government hinted it would cut welfare expenditures. It has also decided to phase out special allowances to single mothers and the elderly.

Makoto Yuasa, secretary general of Moyai, a nonprofit group working on behalf of the poor, said the government should raise minimum wages without slashing welfare.

"The government is abandoning its responsibility to provide a basic level of subsistence through social security, under the slogan of encouraging the poor to become self-reliant," Yuasa said. "Such measures will not bring people out of poverty."

Meanwhile, young, unskilled, temporary and part-time workers are adding to the ranks of the working poor.

According to the labor ministry, the number of "freeters" -- part-timers aged between 15 and 34 or jobless people of the same age group eligible for part-time work -- fell from 2.17 million in 2003 to 1.87 million in 2006. But in 1991, there were only 1.01 million freeters.

Freeters' annual income averaged 1.67 million yen, while full-time workers' annual salary stood averaged 5.32 million yen, according to a 2004 survey conducted on 356 freeters and 4,473 regular workers by Recruit Works Institute, a private think tank.

The bill to revise the Employment Measure Law aims to make it easier for freeters to land regular jobs.

The prevailing view by experts is that freeters are victims of the 1990s recessions. When they graduated from high school or university, there were fewer regular jobs, forcing many young people to settle for part-time jobs.

With the economy on the upswing, and with the prospects of a shrinking workforce in the not too distant future, experts say now is the time for the state and employers to take effective steps to turn freeters into regular, full-time workers.

The Employment Measure Law revision is supposed to encourage the hiring of more young unskilled temps, taking their past job experiences into consideration. It would also ban companies from setting an age limit for job applicants and hiring.

According to a 2006 survey by the Japan Business Federation (Nippon Keidanren), the nation's largest business lobby, only 1.6 percent of 2,149 firms said they were willing to hire freeters, compared with 24.3 percent who were not. But 64 percent said they would consider hiring freeters if their experience and skills were adequate.

Shinobu Wajima, manager of Nippon Keidanren's Employment Management Group, said some firms have already taken steps to hire freeters by, for example, introducing a trial system.

Under the system, young workers are given a three-month probationary period to let employers decide whether they are worthy of full-time work. About 80 percent of 44,110 people who took part in the trial system and completed the probation in fiscal 2005 became regular workers, according to the labor ministry.

However, welfare recipient Kinjo is skeptical.

"Companies only want to hire new graduates, not someone like me who only has part-time work experience," Kinjo said, adding he has never managed to land a white-collar job.

"I feel hopeless about my future. Even if I recover and start looking for a job, I'm sure the only work I could find would be unstable, heavy labor at construction sites," he said.

Economist Kadokura said firms should stop hiring low-wage temps and part-timers just to slash personnel costs, and instead add more regular workers and provide training.

"I think firms that are only bent on keeping labor costs low by hiring nonpermanent workers will be hit hard when they face the coming labor shortage," he said.

Related stories in this series:
Overtime or the cure -- which is worse?
Reforms offer little promise for part-timers