Presence of welfare society in Japan had helped in many forms for increasing the production and economy of the country. With the help of this welfare society trade unions gained pace and they helped in creating job security for the employees. They wanted to support the philosophy of a welfare society rather than the welfare state. In this state, the total employment was characterized with the small and medium sized companies. They wanted this action to be taken so they can avoid the big and small companies for avoiding them from bankruptcy (Wang, 2000). Welfare society and Japanese state had devoted the money so they can work for the industrial development. Overall miracle lies in the form of unity among the citizens. Birth of this welfare society started during the time frame of 1946 to 1949 and Japanese economy helped in sustaining the $500 million economy that boosted the industries. After the war, American policies got rigid towards trade and investments in various sectors stopped. It was high time when people realized that they will have to support each other. When they will work alongside and invest in their sectors, they will never have to ask for money from other countries (Dunning, 2014).
This welfare society will help the individuals in finding new jobs and create trade unions. Along with this the occupational force in America invited from the Detroit banker helped in dodging the balanced economy of Japan. Dodge plan was introduced for reducing the inflation so Japanese government can pay their debts. In the year 1949 balance budge plan helped in reducing the inflation and repaid government debts. Fix exchange rate was $1=360 yen in comparison with the $1=110 yen today. The exchange rate today for Yen had to go through many procedures that showed the significant increase in the inflation rate of 1949 (Menton, 2003). In reaction to this Dodge plan, massive lying of the workers and recession of the economy in the country increased. Japanese goods in the international market started to lose their charm. In reaction to this, state bank started to limit the loans given to private companies.