Japan: as egalitarian as... India ?

Japan's Gini coefficient has been calculated by the United Nations, the CIA and the OECD. All of them give quite different numbers, ranging from a very low (= very egalitarian) 24.9 for the UN to a surprisingly high 38.1 for the CIA and an almost outrageous 44 for the OECD (before taxes and transfers, granted). See Japan: global rankings for me details.

In comparison India, the country of castes and income inequalities par excellence, was given a score of 36.8 by both the CIA and the United Nations. The USA, probably the developed country with the biggest gap between the rich and the poor, got a rating of 40.8 by the UN and 45 by the CIA, while the OECD gave the US 46 before taxes and transfers and 38 after.

The CIA accords an index of 23 to Sweden, 25 to Norway, 26 to Denmark, 27 to Germany and 28 to Belgium, for instance. The UN figures go in the same direction, giving 24.7 to Denmark, 25 to Sweden, 25.8 to Norway, 28.3 to Germany, 33 to Belgium...

Japan, a nation that think of itself as egalitarian and virtually class-less, does not look like an Asian Scandinavia on paper. In fact it lies somewhere between India and the USA. How comes ? Are the Japanese deceiving themselves into believing that wealth is fairly distributed ?

When we stop to think about it, income inequalities abound in Japan. Between sexes. Between the age groups (seniority system). Between Tokyo and the prefectures. Between salarymen working for big corporation and small businesses.

The income gap between the CEO and top managers may not be as big as in the US, but the gap between high-ranking cadres in big companies and small businesses (including restaurant workers and shopkeepers) is huge. Japan has so many temporary workers and low-level sales jobs (e.g. staff in convenience store and other chains) paid at the minimum legal hourly wage that income inequalities are not that surprising after all.

In general, countries that have a lot of big corporations owing lots of chain shops all over the country (as is the case in Japan and in the USA) end up with rich bosses and shareholders and poor workers. Countries with lots of small, privately owned or family-run businesses, especially if they are well managed, have far less difference of revenues. European countries have in average much more small businesses. Just look at the thousands of Italian designers and artists, the millions of French, Spanish or Italian cheese-makers and winegrowers, or the myriad of French and Belgian bakers.