The Japanese media and politicians talk up rising income inequality in Japan and make it seem as if it’s a huge problem. While income inequality in Japan has indeed been rising in recent years — as it has in most other developed countries — this kind of rhetoric needs to be put in context. Doing so makes it obvious that income inequality is exceedingly low in Japan and the wealthy are taxed up the wazoo to keep it that way.
First, income inequality in Japan is actually very low compared to most other countries. The picture below (courtesy of Wikipedia) compares the Gini Index (a measure of income inequality) across many parts of the world. Japan has a very low Gini Index in this context, alongside countries in the Nordic region. On the other hand, inequality is highest in emerging markets, in particular Africa and South America. It’s interesting that even the U.S. — where the democratic presidential candidates are making inequality a key issue — has only moderate inequality in the global context.
Continue reading “Inequality in Japan is very low despite what the Japanese media and politicians say”