Effects of the Economic Downturn in Japan

by Shoji and Yukiko Nakanishi, DPI-Japan
April 1998

The Japanese Government has been trying to promote decentralization for the last 6 - 7 years. The bad economic situation has strengthened this trend, with expectations that local budgets to be allocated to support it. In the field of social welfare, the plan is to move the responsibility to provide many services from the national level to the prefectural level, and from the prefectural level to the municipal level. Disabled persons are afraid that some services will be cut due to scarce local resources.

Effects on the lives of people with disabilities:

• Due to the increased unemployment rate, it becomes difficult to find a job on the open market, especially for persons with severe disabilities. Being unemployed, they are forced to stay at their parent's home. Disability pension is not enough to live independently.
• Sheltered workshops have difficulty to get contracted work from big enterprises. This leads to the reduction of the workshop's profits.
• When a company employs a person with a disability, they can receive a subsidy for 3 years under the quota scheme. Some of those who have been employed for more than 3 years were fired, or are forced to resign.
• Intellectually disabled persons working in a factory in Mito-city had been abused by their employer. Although some parents were aware of it, the majority of the parents have been reluctant to take action against the factory because of the fear that their children cannot find work elsewhere.

Effects on the implementation of programmes:

• The Tokyo Metropolitan Government cut its subsidy for the programmes of non-profit organizations from 3/4 to 1/2, due to their policy to manage well-balanced financial situation. Of course, no new programmes can apply for the subsidy.
• Many foundations cut the amount of their grant to 1/3, due to the bank deposit rate reduced from 3% to 1%. We non-profit organizations have even less opportunity to get their support.