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Editorial: Japan parties must clarify roadmap for wealth distribution ahead of election

The coronavirus pandemic made abundantly clear the serious economic gap among the public in Japan. It is a reflection of the strains caused by the "Abenomics" economic policy mix that continued for nearly nine years since the launch of the second administration of Prime Minister Shinzo Abe. How the public judges the economic initiative will be a major issue in the upcoming House of Representatives election.

    It was two years ago that a 37-year-old woman opened up a small ramen shop in Tokyo's Kanda district with her husband. The unique flavor of their ramen made their shop popular, with people lining up for bowls of piping hot noodles. But the number of customers waned as the coronavirus pandemic swept through the country. The couple even considered closing up the shop permanently.

    Despite coming under hard times themselves, they began a "children's cafeteria," in which they provided free boxed meals to the community. They did this because they felt there were families that were struggling more than they were.

    Previously, the woman had been a single mother. She could only find non-regular, low-wage jobs. The government appealed to the public that employment had improved due to Abenomics, but she did not reap any of the benefits.

    Many of those who lost their jobs due to the pandemic are single mothers and others who have been working at restaurants and other dining establishments as non-regular employees. The woman with the ramen shop knew the hardships they faced.

    The couple were encouraged by children from such households telling them their meals were "delicious." They were also given a lot of support from those around them. Vendors they knew would give them vegetables for free.

    Even after the coronavirus state of emergency declaration was lifted in Tokyo, the couple have continued to operate their children's cafeteria. The lives of people who are in vulnerable positions are not easily rebuilt. They want to help each other get over the hard times.

    It is in large part due to such self-initiated efforts on the part of the public that Japan has been able to get through the pandemic. But politicians must not rely on these efforts. What is being sought in the lower house election from political parties is an indication of prospects for when the public's fears will be resolved and their lives will improve.

    Abenomics is a neoliberal policy that prioritizes economic growth and efficiency. It was passed down to and carried on by Prime Minister Abe's successor Prime Minister Yoshihide Suga, who placed importance on self-reliance.

    Major corporations and the rich increased their wealth due to lowered corporate taxes and high share prices resulting from monetary easing. But many members of the public struggled from sluggish growth in wages. Employment may have increased, but most of it has been non-regular. Consumption has remained low, as has the economic growth rate.

    The wealth gap grew even greater under the coronavirus pandemic. Major corporations, primarily those involved in the digital industry, have done extremely well, with their stocks rising. Meanwhile, non-regular workers were being let go from their jobs one after another, leading to 1.3 million fewer non-regular employees than two years ago, prior to the pandemic.

    The economic structure that brought about the strain must be fundamentally reviewed, and gaps in wealth must be remedied. For that to happen, redistribution of income is indispensable. If distribution results in the expansion of the middle class, consumption will be invigorated, which will contribute to economic growth.

    The fact that both ruling and opposition parties incorporated distribution into their campaign platforms is likely because they recognize it to be an important issue. The problem is how they propose that distribution be made a reality.

    Prime Minister Fumio Kishida announced that he would design an economic policy worth several dozen trillion yen (approx. several hundred billion dollars), saying that the pillar of the policy would be cash handouts to households and business operators who are in straitened circumstances. The opposition Constitutional Democratic Party of Japan (CDP) declared that it would come up with a supplementary budget of over 30 trillion yen (approx. $263 billion), and lower income tax and consumption tax on a time-limited basis.

    But no matter how large the magnitude of such measures, once temporary distribution is over, the system that brought about the wealth gap in the first place might stay in place. There is a need to continue distributing by securing permanent funds.

    If we rely on debt as we have done so far, we only serve to inflate the debts that future generations will have to pay back. In the midst of a stagnant economy, we must be careful in determining how burdens are borne.

    It is reasonable to seek a certain level of burden-shouldering from major corporations and the wealthy who are increasing profits even during the coronavirus pandemic. It makes sense also from the standpoint of remedying the wealth gap.

    But Prime Minister Kishida sealed off the idea of beefing up taxation on gains from stock transactions, for which he had earlier expressed enthusiasm. He is now saying that he will "distribute the fruits of economic growth," which is the same logic as Abenomics, and lacks persuasive power.

    The CDP has argued for an increase on corporate taxes and other measures. But it has not clearly stated the exact magnitude or timing of such undertakings.

    The coronavirus pandemic has brought economic policy to a turning point.

    The United States, where neoliberalism had taken center stage since the 1980s, has seen the birth of the administration of President Joe Biden, which is calling for the wealth gap to be redressed. The New Deal, which was implemented during the Great Depression prior to World War II has been attracting attention once again.

    Then President Franklin D. Roosevelt not only established public works projects that would temporarily provide relief to the unemployed, but also implemented mechanisms that would support the lives of people subsisting on the minimum wage and pensions for the long run. It is said that Roosevelt built a foundation for the American economy to develop into the postwar period.

    Japan also needs to build a foundation on which to rebuild its economy. Each political party should present a clear road map of how they aim to make distribution a reality.

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