April 24, 2020

Akahata editorial

Prime Minister Abe Shinzo and some of his Cabinet members boast that Japan’s emergency economic measures for relief against the coronavirus crisis are the best in the world. This is, however, totally false. Abe recently published an economic policy package to deal with the COVID-19 outbreak, but he refused to include a measure to provide compensation to people suffering income loss. As a reason for his refusal, Abe insists that no country in the world offers such compensation. On the contrary, many countries already implemented compensation programs to this effect. Japan’s negative stance toward a loss-of-income benefit goes counter to the world trend. In addition, Japan’s support measures are weak and slow compared to other countries’ measures. In order to realize “the world’s best” support measures, the Abe government needs to drastically improve its policies by listening to public opinion and taking into serious consideration opposition parties’ proposals.

Many countries implement various types of loss-of-income benefit programs

In Germany, under Article 56 of the law on infectious disease prevention, the state government is required to provide compensation to workers who are prevented from doing their jobs and to those whose children are banned from going to school as part of efforts to contain an epidemic. In response to the current coronavirus outbreak, the national government, based on this provision in the law, already began making compensation payments. It is providing cash assistance to self-employed and small business owners experiencing financial difficulties. The amount of the cash benefits for three months is 9,000 euros (1.05 million yen) for companies with up to five employees and 15,000 euros (1.75 million yen) for companies with up to ten employees. Eligible recipients can receive this payment in a lump sum. This money can be used to pay the rent and lease charges.

In the U.K., the government in March decided to give financial support to private companies, self-employed, and freelance workers who suffer income loss due to the COVID-19 crisis. The government provides subsidies of 80% of what they earned before or up to 2,500 pounds (330,000 yen) a month. Companies which maintain employment will be paid by the government cash benefits equivalent to 80% of wages paid to workers. These payments will last until the end of June. The government on April 20 began accepting applications for the program from private companies and it received more than 140,000 applications on the first day alone.

At the end of March, the U.S. government enacted an economic package totaling 2.2 trillion dollars (about 240 trillion yen), equivalent to approximately 10% of its GDP. This package includes funds for the provision of up to 1,200 dollars (about 130,000 yen) in cash benefits to each adult, 500 dollars to each child, and 370 billion dollars to small- and medium-sized businesses struggling to maintain jobs.

As mentioned above, the governments of other countries quickly took actions to assist workers, self-employed, freelance workers, and SMEs to survive the current health emergency. In contrast, in Japan, facing fierce public criticism, the government withdrew its plan to give a one-time cash assistance of 300,000 yen to households experiencing a drastic income cut and decided to distribute a 100,000 yen cash benefits to all individuals instead. Among major countries combating the coronavirus crisis, Japan is the only nation where the government made a major change in its supplementary budget draft because the Cabinet-approved support measure was grossly insufficient. For various reasons, including the lack of costs for anti-corona efforts in the initial fiscal 2020 budget, the Japanese government fell seriously behind in the fight against COVID-19. In terms of state measures to support people’s survival under the ongoing crisis, Japan is considerably lacking in comparison to other countries which began implementing required measures in March.

The Abe government still refuses to provide compensation for loss of earnings. It recently decided to allow local governments to use government grants for regional revitalization of one trillion yen for their own programs to compensate for corporate losses caused by business suspensions. Compensation, however, should be given by the national government. In order to make state subsidies available for local governments’ own compensation programs, it is necessary for the central government to drastically increase the size of emergency subsidies to municipalities.

Let us strengthen public pressure on government to protect livelihoods and businesses

In Japan, pushed by public opinion, the government revised its supplementary draft budget - an unprecedented move. However, the government decision on a one-time cash payment of 100,000 yen is not enough. It is necessary to strengthen public pressure on the government to force it to implement measures to protect workers and businesses struggling with financial difficulties caused by the government’s stay-at-home and business suspension requests.

Past related articles:
> Local gov’ts in favor of loss-of-income benefits unlike central gov’t [ April 11, 2020]
>Compensation for loss of income essential for gov’t emergency coronavirus measures: JCP [ April 7, 2020]