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Some local governments think health checkups save money, and some don’t

April 5th, 2014 by

Preemptive stride: If you do have metabolic syndrome you can guess what the doctor will tell you to do

Preemptive stride: If you do have metabolic syndrome you can guess what the doctor will tell you to do

Though there’s a minority opinion to the contrary, conventional wisdom says that regular health checkups are the only way to prevent the development of major illnesses, so, logically, they should also help reduce healthcare costs in the long run. This is the concept behind tokutei kenko kensa, or “special health checkups,” that were started six years ago by the Ministry of Health, Labor and Welfare. The main target is metabolic syndrome, the inevitable gain in fat that accompanies midddle age and which, unchecked, is thought to be the gateway to many so-called lifestyle diseases, like diabetes.

The idea is that local governments would provide checkups to insured residents between the ages of 40 and 74 with national insurance, which, in principle, doesn’t cover regular general health checkups since Japan’s public health system is designed to treat existing problems. If the special checkups uncover unhealthy situations, then the individuals are advised with regard to better diets or exercise regimens, or even pharmaceutical assistance, so as to head off costly treatment down the road, like, for instance, dialysis, which can cost on average ¥5 million a year, most of which ends up being paid for by the government, both local and central.

CONTINUE READING about health checkups →

Call the sitter: Parents resort to online services out of economic necessity

March 31st, 2014 by

Public daycare center closed for the day

Public daycare center closed for the day

A few weeks ago news outlets were all over a story about the death of an infant who had been placed in the care of a young freelance babysitter. The media was quick to blame the mother, at least by implication, since she had found the man through an Internet portal site that matched people who needed babysitters with people who provided such services. Many of these providers seem to be unlicensed, but babysitting as a job description is relatively new to Japan.

What seemed unusual in this case — though it’s actually quite common — is that the two boys the mother left with the man were watched at the man’s apartment in Saitama Prefecture, rather than at the woman’s residence in Yokohama, which is normally the way babysitting works. In the woman’s defense, some media pointed out that she had used the man as a babysitter previously and didn’t trust him, but because he used a different name this time she wasn’t aware she was leaving her children in his care.

However irresponsible the woman was in this situation, the fact is that there is an increasing number of parents who rely on such services. The Internet portal site that the woman used has 10,000 registered users and 6,000 registered sitters. The paucity of daycare services in Japan is a well-covered issue, and some parents can’t wait for the government or the private sector to rectify the situation, especially if they have infants and toddlers, which conventional daycare centers don’t usually accept anyway.

CONTINUE READING about childcare portal sites →

Consumption tax hike projected to increase appeal of electronic money

March 24th, 2014 by

The ones: You'll be seeing more of these guys in the near future

The ones: You’ll be seeing more of these guys in the near future

Last month the national mint intensified production of ¥1 coins in anticipation of the consumption tax hike on April 1. The Ministry of Finance wants 26 million of them manufactured by the end of March, and then another 160 million after the start of the new fiscal year. Once the consumption tax goes up from 5 to 8 percent, retailers will need more small change.

With a 5 percent tax, it’s relatively easy for stores to limit their use of coins since they can set prices based on multiples of 5. Maybe it’s possible to do that with multiples of 8, too, but not right away, and many fear they will not have enough ¥1 coins on hand when the tax hike goes into effect. An employee of the nationwide ¥100 shop CanDo told Asahi Shimbun, “Altough we sometimes receive ¥1 coins in payment from customers, we don’t recycle them as change to other customers, but now we’re trying to hoard as many as possible.”

If the consumption tax increase is an inconvenience to retailers, it’s even more of a pain in the neck for the government, since it costs between ¥2 and ¥3 to make a ¥1 coin, which is 100 percent aluminum. It’s the first time the mint has produced ¥1 coins on anything approaching this scale in four years. It will also produce an extra 100 million ¥5 coins, just to be safe. The government doesn’t want to relive the small change panic that happened in 1989, when the 3 percent consumption tax was first introduced.

CONTINUE READING about the consumption tax hike's effect on e-money →

Believe it or not, pay phones are here to stay

March 18th, 2014 by

Hello stranger: Pay phone in residential area of Sakae, Chiba Prefecture

Hello stranger: Pay phone in residential area of Sakae, Chiba Prefecture

Last December, during its end-of-quarter news conference, NTT announced that it would shorten the length of time for a basic call on public telephones when the consumption tax is raised from 5 to 8 percent in April. Since pay phones don’t give change and NTT discontinued its IC card service in 2006, it would have been difficult to pass the extra tax levy on to users, so the more logical scheme was to make a ¥10 call shorter. As it stands, ¥10 will get you 60 seconds of connection to a number within the same calling exchange during the day. After April it will be shortened to something like 58 seconds.

At the time it wasn’t exactly breaking news, and for obvious reasons. Who uses pay phones any more? As long as you have a cell phone you likely won’t even notice that pay phones still exist, but they do. According to a government white paper on telecommunications that came out last year and cited on the Sarayomi blog, as of March 2013 there were 210,000 pay phones in Japan. In 2002 there were 680,000. (The peak year was 1986, when there were 910,000.) That means two-thirds disappeared over an 11-year period.

CONTINUE READING about public pay phones →

Government’s new scheme to bolster social security is still hopeless

March 10th, 2014 by

This document was sent out several years ago after the government discovered that it had lost the pension payment records of 50 million people. The document would be used to help locate those records. The program was expensive, but very few people responded.

This document was sent out several years ago after the government discovered that it had lost the pension payment records of 50 million people. The document would be used to help locate those records. The program was expensive, but very few people responded.

The Ministry of Health, Labor and Welfare has announced that starting in April it will “take action” to increase the “collection rate” of national pension premiums, specifically those for kokumin nenkin, the obligatory pension plan for the self-employed and those who otherwise don’t belong to the company-supported kosei nenkin pension system. According to Tokyo Shimbun the idea is to send warning letters to individuals whose incomes are more than ¥4 million and who haven’t contributed for at least 13 consecutive months.

Presumably, the next step will be for the ministry to start siezing assets. The initial criteria would target approximately 140,000 pension scofflaws. Eventually, however, they will go after everyone who hasn’t paid, and since it is estimated that close to 3 million people who should be paying into the system haven’t been for at least 24 months, the job seems daunting if not impossible.

There are many reasons for this delinquency, but the main one has to do with the system itself. Basic pensions apply not only to the self-employed, but anyone who is employed part-time or on a contract basis, meaning their employers don’t pay into the kosei nenkin system. It also includes the unemployed, because according to the law every adult who lives in Japan must belong to the system, whether they work or not. And the premiums are the same, regardless of income or lack thereof: right now ¥15,250 a month (it goes up gradually every year).

The ministry assumes that about 90,000 people who should be “members” are not, and that number is probably higher, but in any case, excluding those who are exempt from paying (very poor, disabled, etc.), the rate of payment into the kokumin nenkin fund was only 59 percent as of 2012, and that portion continues to decline.

In a 2011 government survey, the number one demographic of delinquents was the unemployed, which is easy to understand. However, 28 percent of delinquent payers had part-time jobs, and they said they didn’t make enough to pay. Moreover, 22 percent of the so-called deadbeats were self-employed or working in their families’ businesses. Overall, 74 percent of those who said they couldn’t pay gave their reason as “can’t afford the premiums.” The percentage is increasing because the number of non-regular employees is also increasing.

But the government says that 10.5 percent of households whose income exceeds ¥10 million have also failed to pay their fair share, and it’s these people they are citing first. After that, 17 percent of households with incomes of between ¥5 and ¥10 million are delinquent. Both of these seemingly solvent income brackets say in surveys that they, too, cannot afford the premiums due to “financial difficulties,” but there is also a considerable number who refuse to pay simply because they “don’t trust the system.”

The pension system’s fairness has always been a point of contention. As it stands, if a person pays his fair share for 40 years, the maximum monthly payment he receives at 65 will be ¥66,000, which is not enough to live off of. The main concept behind kokumin nenkin when it was first devised was that the self-employed would still have income from their businesses or the sale of their businesses when they retired. Not only is that not necessarily true, but the bulk of basic pension members are non-regular employees who have nothing else to fall back on when they retire, unless they’ve saved and invested, which is unlikely.

Also, everyone in Japan must also pay into the national health insurance plan, which for most people takes priority since anyone can get sick at any time, but you only retire when you get old. Then there are people with some money who have bought life insurance annuity plans that give them some income when they retire. They may not see the point in paying double for a pension, so they don’t bother paying nenkin.

But the most discouraging aspect of the system is that in order to receive even the minimum payment at retirement, which is less than ¥30,000 a month, you have to pay into the system for at least 25 years. Regardless of one’s mathematical skills, it doesn’t take much calculating to understand that paying ¥15,000 a month for 25 years for a pension that will be so low one will have to apply for supplemental welfare (which is increasingly the case) is not worth it.

What’s particularly maddening about the government’s refusal to acknowledge reality is that it continues to throw money at the problem. Tokyo Shimbun estimates that for every ¥100 that the ministry will collect with its new hardline policy starting in April, it will spend ¥90. In real terms, the ministry has budgeted ¥5.3 billion for “forced collections.” Also, according to the law, it can only make delinquents pay up to two years retroactively, and if the individual has been delinquent for much longer than that the individual may wonder, “What’s the point?,” since he can only receive a pension if he’s paid for a full 25 years.

There is no sense to the system, especially when you consider that the Democratic Party of Japan wanted to change it to something more rational, and made the Liberal Democratic Party promise to revise the system when it gave up the reins of government in December 2012. Since then the LDP has done nothing, because it believes that any change would be unfair to the people who have paid into the system properly all along. Famous last words.

Tax structure encourages getting wasted

March 3rd, 2014 by

Zero's not in it: Selection of Suntory chuhai at discount store

Zero’s not in it: Selection of Suntory chuhai at discount store

There’s no end to speculation as to how the consumption tax increase in April will affect the country, socially as well as economically. Last week, Tokyo Shimbun published a conversation between a college professor and one of its reporters about the effect on beer prices and, in turn, beer consumption, which last year declined for the ninth year in a row.

When the reporter asks the professor about this effect the professor feigns amazement that the reporter, who specializes in tax matters, didn’t know that “42 percent of the price you pay for your beer is already tax.” He goes on to explain that the beer tax is a holdover from the 19th century, when beer was considered a luxury item. Since then it’s become much more the drink of common people thanks to improved and cheaper refrigeration, but the government liked the revenues too much and maintained the tax structure for beer. To the professor’s thinking, the tax should be pegged to alcoholic content, and since beer’s is relatively low the tax should also be lower than it is for other alcoholic beverages.

It’s easy to get people to pay the tax since it isn’t indicated on the package or even at the place of sale, unlike the consumption tax. For the sake of reference, when you buy a 350-ml can of beer you pay ¥77 in tax. If you bought the same volume of whiskey you’d pay ¥129 in tax; shochu ¥70, nihonshu ¥42 and wine ¥28.

Basically, that means the consumption tax is levied on a tax, since the consumption tax is determined by the price that the wholesaler and retailer pays for the product, which, by the time they receive it, already includes the alcohol tax that is levied at the manufacturing stage. “When the government said they’d increase the consumption tax, people got angry,” says the professor. “But no one says anything about the alcohol tax, because people don’t notice it.” The reporter thinks that a “tax on a tax” violates the principle of taxation. The professor doesn’t disagree, and adds that beer accounts for half the revenues brought in by the alcohol tax. Because beer makers are large companies with responsible accounting practices, it’s easy for the Finance Ministry to collect the tax. The reporter says, “Why don’t manufacturers get angry?”

Actually, that’s why they started making the “beer-like” happoshu in the late ’90s. Because the ingredients used in happoshu are different from those that define beer for tax purposes, the beer tax doesn’t apply, and so makers could sell it at a much lower price. The government, of course, didn’t like that and eventually raised the tax rate for happoshu, too, though not as high as it is for beer (¥46 for a 350-ml can). Makers came back again with dai-san (third type) beverages, which use fermented soybeans for flavor instead of hops, and that got around the happoshu tax (¥28 for 350-ml). But while these new, cheaper brews outsold “real” beer handily, sales for all three beverages have still decreased over time, due to the shrinking population and a younger generation of consumers who don’t drink as much as their parents did.

In that regard, beer makers don’t see much of an impact of the consumption tax hike on beer and beer-like beverage sales; or, at least, they don’t see any point in trying to offset the hike. But they are modifying their lines of canned drinks that contain shochu, colloquially called chuhai. As the price of chuhai goes up thanks to the consumption tax, they are increasing the alcohol content. In fact, many companies have already added more alcohol to their chuhai products.

Kirin Beer increased its Hyoketsu Strong from 8 percent to 9 percent alcohol, and in April it will boost its Hon-shibori Lime chuhai drink from 6 to 8 percent.

Asahi Beer is already advertising its new Karakuchi Shochu Highball, which is 8 percent, in a bid to persuade normal fans of high balls — whiskey and soda — to switch to shochu and soda. That’s a full 5 percentage points higher than Asahi’s other chuhai, Slat, and both beverages will be sold for the same price. (Note: Slat is aimed at young women and the word suggests slimness, though an English speaker may be forgiven for thinking the name an unfortunate choice for such a target group.)

Suntory’s chuhai product, -196 Degrees C Strong, which enjoyed a 22 percent share of the chuhai market in 2012 thanks to its already hefty alcohol content, will be strengthened from 8 to 9 percent. The company told Asahi Shimbun that it expects sales to grow by 8 percent.

The target is middle-aged and elderly men, the main demographic for alcoholic beverages anyway. Makers think they will be attracted to the cost effectiveness, according to the Asahi, which means they can “get drunk more easily” for the same amount of money. In many countries, tax on alcohol is referred to as a “sin tax,” since it has a double-edged purpose: raising revenues on a product or service that may be harmful to society, on the one hand, and on the other checking consumption of the harmful product or service by making it more expensive.

This latter purpose doesn’t seem to apply in Japan, where alcohol companies have figured out a way to use the tax structure to their advantage. There’s no sin in that.

For young women sex industry offers safety net the government doesn’t

February 26th, 2014 by

A sign teases sexual services.

A sign teases sexual services.

One of the pillars of Abenomics is getting more women to join the workforce, but since last fall, when a young woman in Osaka was found in her apartment starved to death, the media has been reporting dire statistics about poverty among women. According to government statistics, one-third of females who are productively employable and living alone make less than ¥1.14 million a year, which demarcates the government’s poverty line.

The peak year of employment in Japan was 1997, when 38.92 million men had jobs and 26.65 million women. In 2012, the number of male workers had dropped to 36 million, while that of females had declined less, to 26.5 million. In 2012, women made up 42.3 percent of the workforce, a three percentage point increase since 1980. However, the stability of that work seems to be going in the opposite direction. The number of non-regular and part-time workers is on the increase, but the number of women in this group is disproportionately larger: 57.5 percent for females to 22.1 percent for males. Without regular employment and the opportunity for periodic pay raises, these women invariably fall into a cycle of poverty from which they can never escape. The situation for single mothers is even worse: 80 percent of those who work fall below the poverty line, even with government assistance factored in.

NHK’s evening in-depth news program, “Closeup Gendai,” has aired a series of reports on poor young women. One program broadcast in late January profiled several. There was a teenage girl working at a convenience store to support her sick mother and three siblings while taking a high school equivalency course that she hopes will lead to a night school program that will earn her a license to teach nursery school, but the program will cost her ¥80,000 a month, which means she’ll have to take out a loan that will be paid back when — and if — she gets a job. There’s a woman from Aomori Prefecture who worked three jobs but still couldn’t make enough to support herself since the minimum wage in the prefecture is only ¥650, so she came to Tokyo, where the minimum wage is higher, but so are living expenses.

Experts interviewed by NHK point out that women have traditionally taken low-paying service jobs because they weren’t expected to stay on, eventually marrying and having children. But now young women don’t have as many marriage prospects due to lower incomes for marriageable men. More of them have to support themselves, but there are only these low-paying service jobs which aren’t enough to live off of. The cycle of poverty is already in gear, because these women’s parents are themselves poor, which is why they no longer live with them. When a reporter asks one woman if she hopes to have children one day, she looks at him as if he were crazy. She can’t even feed herself. How could she feed a child?

But there are women trying to do just that. One 28-year-old single mother in Hiroshima is raising a 2-year-old and a 4-year-old. She makes ¥100,000 a month and receives a child allowance of ¥40,000 from the government. She herself grew up in a poor family and had to start working when she graduated from junior high school.

But according to one program in the series there is an area of hope for such women: the sex industry (fuzokuten). Massage parlors and escort services offer not only dormitories for staff, but also daycare if the workers have young children. Want ads indicating such benefits are common, but the NHK director could only find one company that would agree to coverage. The camera shows the manager of the business talking on the phone, telling a customer that the fee is “¥19,000 for 90 minutes, if you don’t state a preference for a worker.” At this company, 40 percent of the fee goes to the company and the rest is kept by the worker. The manager says they get a lot of applicants, especially from single mothers because of the daycare. Though some businesses run their own daycare, most contract with outside services. The dorm is also a big draw, though the manager points out that “sometimes there are more staff than there are available rooms.”

One of the employees interviewed by NHK says she is 21 and has an 18-month-old daughter. She had to start working right after the girl was born, but there are no daycare facilities that accept infants. She had no choice but to work here, and in six months she has managed to save ¥700,000. She makes ¥300,000 a month. “When I’m 25 I’ll probably have to quit, and my parents don’t know I work here,” she tells the director, but by that time she hopes to have a lot of money saved. Another interviewee is in her 30s, also a single mother. She is here to look for a job. She once worked in the sex industry but quit when she got another job. Then she fell ill and applied for welfare, but was told it would take two months to check her background and than another month to process her application. She can’t wait three months.

During the seven days that NHK covered the business, it hired 15 new employees. Though the information reported on the program is sobering, several Internet commentators have pointed out that these conditions have always been the norm in the sex industry, but it’s only now that people are paying attention because of the economic situation.

 

Image via furibond

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