Japan has highest-ever income gap in 2004

   Japan’s disparity in household income recorded the highest level ever in 2004, according to a 2005 Welfare Ministry survey released on August 24. The ministry conducts the household income redistribution survey every three years.

   The average annual income per household in 2004, excluding public pension benefits, was 4,658,000 yen, down 450,000 yen (8.8 percent) from 2001.

   The group of households with an annual income less than 500,000 yen accounts for 23.4 percent (up 4.7 points from the previous survey), the group with 5 million-5.5 million yen 3.8 percent (down 0.2 points), and the group with more than 10 million yen 12.4 percent (down 0.8 points).

   In the 2005 survey, the Gini coefficient that indicates the inequality level was 0.5263, the highest ever, largely exceeding 0.498 in the previous survey. It is the first time that Japan’s index exceeded the 0.5 line.

   This survey result shows that Japan’s income disparity widened under the “restructuring” policy of the Koizumi Cabinet that was established in 2001.

When income redistribution, including taxes and social welfare benefits, is taken into account, the Gini coefficient in 2004 was 0.3873, also a historical high.

- Akahata, August 25, 2007