Japanese pension system; Hatsushima (8-15-10)

Seeing seagulls cutting through gusty winds, I was on a ferry off Hatsushima Island in Atami, in the eastern tip of Shizuoka, when one of my limited male friends from high school forwarded to my cell phone a word, “Free?,” meaning, “Could you make time for hanging out together?” Though, considering his asking difficult to meet I didn’t make any quick response.

I don’t clearly remember when we shared conversation in depth the most recently, but at least several years ago he was a part-timer at an outlet of a major convenience store chain, working the nightshift and receiving a decent hourly wage.

A lack of deep knowledge about his family doesn’t help explain his case, but scads of self-employed and part-time workers are said to be negligent in filing a final income tax return and paying into the national/public basic pension plan. To support the latter, the Daily Yomiuri, the morning edition of today, cites 60% of the population who meet the pension duty.

The national pension plan is intended for anyone who wants to become a beneficiary, while the employees’ pension plan or the mutual-aid society pension plan (for public servants) is added on top of the national pension plan. The pensions of the last two plans depend on the pensioners’ incomes.

Back to my high-school friend, again it’s so far unknown to me whether he complies with the government’s intention to make all the population fulfill their pension duties. Yet at least his case piqued my curiosity and led me to consider how individuals should contribute to our society, involving consumption.

Excuse me for hypothesizing that he regularly visits neither the tax office nor the ward office, but even in this situation his prodigality shown back then convincingly reflects him as a contributor to Japan’s aggregate consumption and economy, possibly effective enough to cover the lack of paying pension premiums.

While some people might not have any fulfilling hobby to spend money on, Morning Musume, an all-female Japanese pop band, became his raison d’etre. Back then, I and he went to a karaoke room in our area almost every Saturday night. If there was any rational reason, not a glass but two of Kahlua and milk ordered were reposing on the table, before him. He thus nicely imparted a mood of idiocy to the room. Such a place was communal also for us.

After being formed in a then-popular TV show akin to “American Idol,” which selected singers through a series of competitions, the girls band, to be followed by other ones and singers, was getting all the rage to prompt even young men and women who don’t go to concerts to sing in karaoke rooms.

Although he was initially in this kind of group, with his fervor for Morning Musume further fanned by its more redoubtable popularity, he later began telling me what concerts he had gone to. (He had quite a few times.) For example, he told me that he had made use of two consecutive days off, staying overnight outside a hotel, a little stupid act; On a separate day, he explained to me how the audience had made a somewhat rambunctious parade from the concert venue to its closest station and police officers had been called in to deal with the mess.

I am sure that he didn’t save money. Here, another piece of evidence: In an attempt to collect the photo cards of all Morning Musume members, he ran trial and error, buying one box of cards after another. He even deigned to grant me overlapped sacrifices. [??]

Again, it remains unclear whether he volunteered to report his annual income which is subject to taxation and pay for the national pension plan. Nevertheless, his such economic contribution--obvious, counting in the five percent consumption tax--could point to another probable demographic in contrast: there must be some who don’t fail to do bureaucracy to pay a final income tax every year, but don’t buy things so much.

Despite the favorable economic results after the introduction of the eco-points program, which would encourage the buyers of eco-friendly products to purchase additional items, it’s said that some experts project the phenomenon won’t last long because the economy-stimulating plan is going to end in this year. In addition, while it’s said that flat-panel TVs are selling well due to the systemic switchover from the analogue to the digital next year, a sales downturn will likely ensue after a good performance.

However, in view of sustaining the lives of aged citizens growing in number, constant consumption is increasingly becoming important for the upkeep of the nation’s money flow, as part of the aggregate revenue is to be allocated for pensions.

I was shocked by a fact: I had believed that I had been paying for both the national and the employee’s pension plans for my own future. Yet in actuality my expenditures on them are for helping present beneficiaries make a living. This mechanism even doesn’t specify a self-employed person whose business performance might not be so good. Moreover, the future return will already generally be lower than the monthly payment of 14,660 yen in the national pension plan. The sentiment of those who refrain from visiting ward/town offices may have some understandable part.

Notwithstanding the above, retired elderly people should never be forsaken. In the face of the stark 60%, the government has to make the national pension system more bindingly collective.

The leading Democratic Party of Japan with its coalition partner has been suggesting Sweden’s model as ideal in budgeting pensions. Under this model, a minimum distribution is guaranteed for low-income earners in collaboration with tax revenue while beneficiaries in the middle- and upper-class brackets are unspecified. (The model differs from the Canadian one in which pensions for people in the middle-class are also augmented.) With the Swedish model, although the wages of the high-school mate of mine are decent, to me he with a certain degree of contribution to the national economy seems to deserve the entitlement.

To avoid paying into the national pension plan and instead save money while living frugally may be a way formed due to present financial difficulty and/or fear about surviving the future, a decision made by knowledge about pension schemes in Japan. Nevertheless, unless overall consumption is kept at a satisfactory level and a pace apart from spikes formed after each economic stimulus is taken into effect, Japan’s future prospects are not bright.

As my friend demonstrated, finding something critically important for his or her life will likely lead to unfettering them from being stingy.

Several years ago, he was after Morning Musume. And now, I believe he is after AKB 48, a separate band of the same ilk. And, my answer to his question is that I got this essay done after coming back home on Sunday.