As government expenditure increased it will alleviate unemployment and create

As government expenditure increased it will alleviate

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create jobs that provide income for the people (Gorman, 2003). The most cost-efficientway of government expenditure is on public works (Amadeo, 2019). Therefore, thispolicy will increase aggregate demand and GDP. However, this policy may fail to themultiplier effect. For example, if the government reduces taxes to spur consumption, buthouseholds save the money instead of spending it, neither the consumption norinvestment will raise (Gorman, 2003). Budget deficits may also occur if the governmentspend more than they earn (Gorman, 2003). The feasibility of this policy may be low, asPage 4of 7
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Page 5of 7ECON1016 SEM1 2019there has already been a problem in Japan, where people tend to save their incomeinstead of spending it. Rapid Aging Population due to Low Fertility Rate and High Life Expectancies In 2018, people aged 65 and older in Japan make up a quarter of its total population andit is estimated to reach a third by 2050 (Marlow, 2015). The higher demand forhealthcare and an increase in retirements will lead to an increase in governmentexpenditure. This combination of higher spending commitments and lower tax revenuewould be an issue for a country with existing debt issues. This policy brings inimmigrants of working age to fill up job vacancies caused by retirements, and increasethe country’s population and GDP (Pettinger, 2016). However, it may lead todispleasure amongst locals as they feel that foreign talents are competing with themover jobs and cause unemployment. Hence, immigrants may face discrimination.Japanese society also has an inferiority complex towards non-asian foreigners (Pulvers,2010). In addition, population growth will cause a rising demand for dwellings and anincrease in housing prices, which cause a sharp rise in wealth gap or income inequality(Pettinger, 2018). This policy is a feasible solution, but Japanese has to overcome its‘Foreigner Complex’ and be more open-minded to immigrants. Natural Disasters has Significantly Impacted the Job Market After the Great East Japan Earthquake in 2011, 841,000 jobs were affected and highefforts were put in rebuilding employment and those affected are commonly the youngand less-educated (Koyama, 2013). The objective of the policy is to offer preventivemeasures for job hunting in the case of unforeseeable circumstances. Impact towardsfamilies surviving disasters are lower when there are income and unemployment ratewill not dip significantly during times of crisis. Due to national debts, such policies willrely largely on taxpayers’ money and may cause displeasure. Additionally, thegovernment may choose to focus on such as immediate disaster reliefs and rebuilding ofhomes. Japan’s lifetime-employment system is unbending and due to seniority wagesystem, some may choose to wait and return to their original companies (Brasor, 2014).
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