NRI Papers
No.124 December 1 , 2007
  Increasing Globalization of the Economy Requires Responses to the Issue of Economic Disparities  
Minoru NAKAMURA
    Economic disparities are especially pronounced in the younger generation and the senior generation. With respect to disparities among the younger generation, careful attention must be paid to the fact that global competition has been affecting not only companies but also individuals.
   In the US, because many system design projects are being outsourced to Indian companies, American systems engineers (SEs) have been losing their jobs. The situation is the same in Japan. In order for Japan to maintain its international competitiveness in terms of human resources, its higher education must be reviewed.
   Under the circumstances where wage deflation is expected to continue, unfair wage gaps must be corrected. The principle of the same pay for the same work must be fully implemented, while reforming current labor laws that excessively protect regular employees.
   With the accelerating trend towards a declining birth rate and an aging society, we will be unable to avoid reductions in pension benefits and increases in medical and nursing care expenses. For households benefiting from pension incomes exceeding the average level, such changes may not cause any serious problems in living an ordinary life.
However, seniors whose pension incomes are below average will have difficulties in day-to-day living when they suffer from a serious disease or require nursing care. The current public livelihood assistance system should be reviewed. Partial assistance should be introduced for specific fields such as only covering the costs of medical care or nursing care.
   Because the rate of wage increases remains stagnant, we cannot expect any substantial increases in medical and nursing care insurance premiums. Accordingly, we will continue to face difficulties in financing medical and nursing care. One way to facilitate the financial stability is to treat the inheritance tax as a special-purpose tax devoted only to medical and nursing care services and to increase the tax rate.
Contents
I Working Environment of the Younger Generation
II Review of Labor Laws
III Globalization and Higher Education
IV Quality of Life under Economic Disparities

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