Commentary by William Pesek
Nov. 11 (Bloomberg) -- One of the more amusing parts of living in Japan as a foreigner is how startled many elderly folks get when encountering you on a quiet street.
Actually I'm the one who should be watching my back.
No, I'm not being ageist, just taken aback by a new government report highlighting senior-citizen crime for the first time since 1991. It's no coincidence that the economy was entering a crisis back then.
The latest elderly-crime wave comes after markets plunged and as Japan frets about a return of deflation. In 2007, a total of 48,605 elderly people were arrested or investigated for crimes other than traffic offenses, a fourfold jump from the early '90s.
Besides theft and shoplifting, acts included embezzlement and assaults. Reasons cited for the increase include money troubles and isolation from families.
You don't need to be a criminal psychologist to see how this touches on many of the economic challenges facing Japan's 127 million people. It gets at everything from the gap between rich and poor to pressure on executives to how the government is dithering as the population ages.
``Elderly crime is a serious problem that our society must shoulder in the years to come,'' the government report said. ``With baby boomers becoming elderly within five years, we have reached a state where we must make a fundamental review of anti- crime measures in a fast-aging society.''
Crime Worries
Japan's crime worries may seem mild. It is one of the developed world's safest nations, where children commute to school without parents, women leave behind their pocketbooks while visiting the restroom at cafes, and lost wallets, cameras and mobile phones are routinely turned in at police stations.
When there is crime in Japan, it's often of the shocking and aberrational kind. In June, a 25-yead-old man drove a truck into a crowd of pedestrians in Tokyo and began knifing people. His spree left seven dead and scores injured.
Economics sometimes plays a role. In August, a 79-year-old woman was arrested for stabbing a younger woman in Tokyo. She was quoted as saying: ``I had no place to stay, so I wanted the police to take care of me.''
Such events expose Japan's underbelly. The government acknowledged last month that Japan is probably in its first recession in six years as exports and production slow.
Japan's Poverty
Even when Japan was growing steadily, few benefited from it. Paychecks didn't fatten along with corporate profits during the longest postwar recovery. That dynamic, which many attribute to former Prime Minister Junichiro Koizumi's free-market policies, is widening the rich-poor gap in a nation that long prided itself as being egalitarian.
The number of households on welfare reached 1.1 million last year, an increase of 300,000 since 2001. Labor unions argue that the trend accelerated because of efforts by Koizumi -- in power from 2001 to 2006 -- to cut state pensions, raise health- insurance premiums and change laws to allow companies to hire more temporary staff on lower wages.
Poverty in Japan? An Organization for Economic Cooperation and Development report last month ranked Japan fourth among 30 members in terms of poverty levels. The OECD's definition is the ratio of a population living on less than half the median income.
Japan certainly needs to modernize its rigid economy and encourage entrepreneurship. Yet such steps haven't been matched with improvements to the social-safety net. Koizumi pushed the ideas of former U.S. President Ronald Reagan and may end up with a legacy more akin to George W. Bush's: Gains were enjoyed very narrowly by the wealthy.
Internet-Cafe Refugees
Television networks are increasingly doing features on Japan's working poor. More 20-somethings are joining the ranks of so-called Internet-cafe refugees -- young people with no home or job who sleep in 24-hour cafes. Women are having a particularly hard time getting full-time employment. Homelessness, too, is on the rise in what's by far one of the wealthiest nations.
``Hardship isn't something people associate with Japan, but it's something that is becoming more and more common,'' says Masaharu Takenaka, director of economic research at the Institute for International Monetary Affairs in Tokyo.
That problem is only made worse by the rapidly aging population. Twenty-one percent of Japanese are over 65, compared with 13 percent in the U.S. Due to a declining birthrate, there will be twice as many elderly Japanese as there are children within five years.
The upshot could be a steady increase in crime among the unlikeliest of demographics. Who knew budget debates of the future would include more funding to revamp prisons to house ever-growing numbers of elderly inmates?
The combination of the Nikkei 225 Stock Average's 41 percent drop this year and the yen's 14 percent increase against the dollar will reduce government-tax revenue and pressure companies to fire workers. With the Bank of Japan's overnight rate at 0.3 percent and headed lower, household wealth will drop even more.
Economic realities may push only the 65-plus age category to desperate measures. In a nation as wealthy as Japan, that's a crime in itself.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
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