Annual Report on Health and Welfare 1999

Prologue

1.Social Security Developed in the 20th Century

"Social security" is a new word born in the 20th century. It is said that the word was created by combining the words "social insurance" and "economic security" in the United States in the 1930s after the world financial crisis. At that time, the country was in the process of establishing laws for security systems including the systems to deal with unemployment, aging, illness and children.

In Japan, the Ministry of Health and Welfare was established in January 1938 as a new ministry to supervise health, social welfare/insurance and labor administration. In 1999, the ministry celebrated its 61st anniversary.
For the Ministry, the year 1999 is the first year after its sixtieth birthday. (The sixtieth birthday is called "Kanreki" in Japan and people celebrate it as a special birthday.)

The Ministry is called "Kosei-sho" in Japanese. The word "Kosei" originates from a Chinese old book, and it means to take good care of people, that is, to enrich national life. Briefly, the goal of the health and welfare administration is to enrich people's lives through the management of social security systems including social insurance, social welfare and health/medical care systems.

2. Expanded Social Security

In Japan, the word "social security" began to be generally accepted after it was used in the provisions of the Constitution of Japan promulgated in November 1946. Half a century has passed since Japanese people started to rebuild their country based on the new constitution after World War II. During the period, social security systems have been expanded influenced by rapid changes in the economic society and in the structure of population including the postwar recovery, economic growth, rapid increase of population, drastic changes in the industrial structure, land development, movement of population, and progress of aging. In each of the ages, people made efforts for the expansion of social security to respond to the diversified demands from each group of people.

Japan's present social security systems widely deal with diversified misgivings in people's lives from their birth to death such as illness, injuries, disabilities, unemployment, need of care, and aging. The systems are deeply incorporated in our lives, and are indispensable for us to lead stable daily lives.

The scale of social security reached about \67.5 trillion in fiscal 1996 in the value of benefits annually given to individuals or households through social security systems including pensions, medical insurance, public assistance, and social welfare for children, people with disabilities or for the elderly. This amount greatly exceeds the annual amount of the general expenditure to be spent by the government in relation to its policies (about \46.9 trillion for fiscal 1999).

3. Factors Raising Uneasiness about the Social Security Systems

In the economic depression of the Heisei era after the end of the bubble economy, people are raising uneasiness about the social security systems. What are the factors that are causing such uneasiness among people? According to the results of public opinion polls, the generations that are presently working actively in the society are more pessimistic about their future and more worried about the social security systems than the older generations. What makes the working generations feel so uneasy? What types of social security systems should be designed and managed to remove such uneasiness from them?

4. Aim and Structure of Part 1

Part 1 of this report features "Social Security and National Life" and clearly describes the following two points.First, the Part clarifies the objectives and functions of social security and gives a clear explanation about the specific effects of social security on the actual national life and economy. Second, the Part clearly shows the development of Japan's social security for about 50 years after the end of World War II and indicates the present level of social security in Japan.

(Aim of Chapter 1)

Chapter 1 explains the objectives and functions of social security. First, the Chapter describes the historical development of social security systems since the end of World War II to the present. In response to the demands for stable living from people, the Japanese government created a wide range of social security systems including public assistance, social welfare for children, people with disabilities and for the elderly, and medical/pension insurance programs. Then it has expanded the targets, ranges and benefits of the systems.

Based on the history of such development, the Chapter briefly explains the objectives and functions of social security. The goal of social security is to provide the entire citizens with sound and secure living in case stability in their lives is endangered. In addition to secure and stable living, social security should also provide support for individual independence or for the fulfillment of household functions. The principal function of social security is to work as social safety equipment (social safety net). Furthermore, social security should also contribute to the redistribution of income, diversification of risks, and to social/economic stability.

The social security systems have been established in multiple layers to deal with various unforeseen events.They support people and enable each of them to lead a stable social life, to meet challenges in life to expand his/her possibilities based on his/her abilities and characteristics, and to live without uneasiness even in illness or in the long retirement period. Social security is more rational and efficient than individual measures to deal with diversified uneasiness in life.

(Aim of Chapter 2)

Chapter 2 analyzes the specific effects and influences exerted by the objectives and functions of social security on household and national economies. Both on the levels of household economy and national economy, Japan's social security systems have been improved at relatively low costs compared with the cases in the United States or in European countries. The Chapter also highlights the significant role that the social security systems are playing for working generations in the stabilization of their living and in the adjustment of unbalanced income among them, although social security burdens on the generations have been especially emphasized in recent years. Furthermore, based on the data on the expansion of social security in terms of economic scale in industry or in employment, the Chapter refers to the economic effect of social security - its contribution to Japan's economic development.

According to the analysis of income redistribution by the social security systems or based on the data about the distribution of social security benefits, it is clear that a considerable amount of income has been transferred from working generations to older generations through the pension/medical care programs. Such transfer has been made as a result of the successful development of pension/medical care programs for the elderly that were designed in the age when the population's aging rate was lower than the present level. With the rise of the aging rate, which means an increase in the number of older people and a decrease in the ratio that working generations occupy in the entire population, there is a fear that social security burdens on working generations will further increase under the present systems. It is therefore required to review the way to share benefits and burdens between working and older generations.

(Aim of Chapter 3)

Chapter 3 gives an explanation about the present level of Japan's social security that has been attained after 60 years since the creation of the Ministry of Health and Welfare and after more than 50 years since the end of World War II. It would be important to understand the present level of Japan's social security to think about the ways to remove uneasiness about the social security systems or to design new systems for the future. The Chapter describes the present levels of Japan's systems for health and medical care, social welfare for children/the elderly and for ensuring income through pensions and public assistance, with the use of international comparison data. Besides it introduces the activities of experts, officials and volunteers for supporting the social security systems, whose abilities and skills have contributed to the improvement of social security services.

In Japan, social security systems began to be created in 1945 and have been expanded thereafter to catch up with the developed countries including the United States and Europe. As a whole, the systems are presently in favorable conditions. The scopes and services of the systems are on satisfactory levels, and are comparable to those in the United States or in Europe.

5. Towards Social Security in 21st Century

It is predicted Japan's population will start to decrease around the beginning of the 21st century for the first time after the end of World War II. The environment has been continuously changing for social security, including an increase in the number of households comprised of only one person, further diversification of family compositions, changes in lifestyle or in people's ways of thinking, and changes in economic situations.Future social changes will require the adjustment of the entire social security systems, in addition to the review of the ways to share burdens and benefits among different generations. The social security systems are becoming more important as social support given to the lives of individuals that tend to be unstable under the pressure for the reform of Japan's traditional economic system. At the same time, it is also necessary to pursue more efficiency in the social security systems that have been expanding their scales in national economy.

(Aim of Chapter 4)

Taking the aforementioned matters into considerations, Chapter 4 proposes the important points of views in examining the social security systems towards the following goals. The goals are to remove excessive uneasiness about the future of the systems; to renovate the concepts concerning social security burdens and the aging society in the 21st century; and to support the future social security systems based on the efforts of every member of society.

First of all, both on the household and national economy levels, the burdens imposed in Japan surrounding social security benefits have been relatively small compared with those imposed in the United States or in Europe. Even if the social security systems are revised as appropriate in the future, the burdens will never set to be extremely heavy. Besides the burdens are always reduced to benefits in the national life.

Second, in the 21st century, the first baby boom generation after World War II will join the older generations.The baby boom generation is expected to change the image of the aging society as a new elderly group. The "new older generation" is comprised of people who have diversified knowledge, values, experience and skills, and they will lend realism to the concept of "active aging society" or of "ageless society (society in which people are not classified according to their ages). It is expected that the older generations will play important roles in supporting the society instead of being supported by the society.

Third, the Chapter proposes the following five viewpoints for the consideration of the desirable social security systems.

(1) Need of strengthening the social security systems as the infrastructure (social capital) for people to lead a stable life

(2) Reestablishment of social solidarity among people through reviewing the ways to share benefits and burdens among different generations

(3) Need of building social security systems in response to the decreasing birthrate and the changes in family forms

(4) Promotion of the efficient and effective social security administration by the unification of the social security systems and by the strengthening of the integration and linkage between the health/welfare and the labor administrations

(5) Promotion of community development and activation of local areas by the improvement of welfare services

Social security ensures stable lives in the socioeconomic situations of the 20th century by giving social support to people against the difficulties that they cannot solve as an individual or that they cannot overcome in an efficient manner. It can be said that social security is a product made by the ingenuity of the entire society. Understanding and cooperation among each member of society support social security based on the spirit of mutual support and solidarity. To keep ensuring stability in individual lives and a sense of assurance in society, it is important for every member of society to support the social security systems towards further expansion and development.

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