The protracted coronavirus crisis has exposed ever-spreading inequalities in Japan, revealing how seriously distorted the country's economy is.

       The negative effects of the pandemic have for an increasingly long time been pushed onto people in weak positions. Low-paid non-permanent employees make up a large part of the workforce in eateries and other industries affected severely by business-hour limits. As of June this year, the restaurant sector had over 700,000 fewer people working in it than two years prior. The fall is due to employment being terminated amid the coronavirus crisis.

       At the same time, major firms including auto makers have seen profits rise hugely over the period. The economies of the U.S. and China, which have been among the first to recover, are behind the healthy figures.

       Japan's gross domestic product figures announced this week for the April to June quarter show clearly the distortions in the economy. While exports are up, domestic spending remains low, and the overall economic picture continues to be dire.

       Spreading inequality in society is increasing the number of isolated people, and deepening division. How to fix this situation is not apparent.

       A woman in her 30s working as a contract cook at a Japanese cuisine restaurant in Tokyo lost her job in autumn 2020. Of the around 10 cooks working at the eatery, all the permanent members of staff kept their jobs. She was the only person to be let go of.

       She worked 12 hours a day, and her annual income never passed the 2.5 million-yen (about $22,800) mark. She also struggled in a male-dominated workplace. Even so, she held on to her dream of one day going independent, and was in the middle of learning her trade.

       The drinking establishment she found work at afterwards refused to comply with requests to shorten its business hours. Her work went on until the early hours, and she couldn't finish in time for the last trains made earlier under the pandemic. She would spend the night at internet cafes. Eventually the schedule took its toll on her mental state, and she quit in spring this year.

       Now she works part-time at a kitchen in a supermarket. She resides in an apartment with her mother, who lives on her pension, and by splitting the rent halfway they lead unstable lives where they just about manage to cover expenses. "All I want is to work normally in a job that pays a wage that lets me live normally," she said.

       Aya Abe, a professor at Tokyo Metropolitan University and an expert on poverty issues, said, "Even if people who have lost work find new employment, if their treatment is poor, they lose sight of their own worth and think they have been cut off from society."

       As long as the government doesn't try to correct the strain in the economy, there will be no clear path to break away from poverty and societal isolation.

       Nearly 40% of the workforce now comprises people in non-permanent employment. The figure was reached under the administrations of former Prime Minister Shinzo Abe, who pushed forward the efficiency-first "Abenomics" economic policy mix. Incumbent Prime Minister Yoshihide Suga aims for a society where "self-help" is prioritized, and makes no attempts to review the present situation.

       The prime minister has announced that in accelerating the country's vaccine rollout, Japan's GDP will return to its pre-pandemic level within the year. But by just restoring the economy to its former state, the structures that create inequality could be allowed to persist.

       Disparity with the rich needs to be reduced, and the middle class expanded.

       The middle class came about with Japan's economic development in the postwar period. Because people were able to receive secure incomes, they were able to play a part in further expanding the economy through consumer activity.

       But from the 1980s onwards, neoliberalism, which champions self-sufficiency and efficiency, has spread across the world. Tax cuts have made major companies and the very rich even wealthier.

       Progress in digitizing society has also perpetuated inequality. Information technology firms make huge profits, but require far fewer hands than industries including manufacturing or retail. The few senior employees and others receive generous remuneration.

       Japan's relative poverty rate indicating what proportion of the country is on low incomes has risen sharply since the 1980s, and even before the COVID-19 crisis it had high rates among developed countries. The pandemic has just made the deterioration of the middle class clear to see in a serious way.

       The administration of U.S. President Joe Biden sees the middle class as the backbone of the country, and is working toward fixing the deepening equalities under the preceding Donald Trump administration. They have put forward plans to increase taxes on the very rich and major companies, and are considering correcting disparities using income redistribution. Discussion on toughening taxation against major firms is also beginning in Europe.

       The U.S. and Europe have judged that a post coronavirus society cannot be a continuation of the one that has existed up to now, and have begun changing their policies for ones that create vibrant economies with the middle class at the center.

       Keio University professor Kohei Komamura, who has researched issues around inequality, said, "It's the government's job to fix the distortions in capitalism. Particularly in a digital economy, Japan must very deliberately strengthen income redistribution."

       It may for example also be an opportunity to move toward a carbon-free society. If active investment is made in environment-related industries, it will lead to huge employment opportunities, and bring about a revival for the middle class. But the Suga administration lacks a perspective that could join up with amending disparities. Using societal transformation as leverage, a radical response including plans for a complete change in structure needs to be made.

       If the middle class grows larger and many people can be part of a society where they lead secure lives, greater consumer activity can be expected, too. This would certainly be of help to Japan's economy.

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