Monday, April 14, 2014

Why is Japan's unemployment rate so low?

Japan's unemployment rate and the recession

Japan's unemployment rate is lower than other developed countries.

United States Department of Labor "International Unemployment Rates and Employment Indexes, Seasonally Adjusted, 2009-2013"

People say that Japan has been experiencing a long recession, called "the lost twenty years", since 1992. If in a recession, then why is Japan's unemployment rate so low?

Japanese workers may be employed under harsher circumstances than unemployed people in the other developed countries

The reason why, has a strong relationship to the following chart.

International Labour Organization (International Institute for Labour Studies) 2009
The Financial and economic crisis: a Decent Work Response P.16

In 2009, to receive unemployment benefits, you would have had to have worked for over one year, have paid for employment insurance, be willing to work as soon as a company offers you employment and now be seeking a job. The amount of benefits received is about half of the amount of the applicant's former salary.
The period of receiving benefits is as follows: for applicants who quit his/her job, they can receive a max of 150 days pay. For applicants who were fired by a company, they can receive a max of 330 days pay. Disabled applicants can only receive a max of 360 days pay.
Labor Department of Japan, Osaka To persons intending to receive unemployment benefits of employment insurance system

Considering the bad conditions for those seeking unemployment benefits in Japan, many job seekers have no choice but to apply for a company which has bad (sometimes illegal) work conditions.

My opinion: The Reasons why Japanese society doesn't like to help unemployed people

Many young people, who feel the harsh reality of employment, never participate in elections. In the election for the lower diet of Japan in 2012, the ratio of people voting in their twenties was 37.89%. For voters in their seventies, the ratio was 74.93%.

Japanese people in older generations – in my opinion, over about 60 years old - have tendencies to think "If a young person is in good health and yet unemployment, he or she is idle. Why do we have to pay our tax for such lazy people?" They spent their youth in the 60s to 80s. At that time, Japanese society kept the unemployment rate at 2%, while in European countries the unemplyment rate was 10%. That generation of Japanese citizens could get jobs easily. I got my job in 1993 (the first year of Japan's "lost twenty years"), after 6 job interviews for the same company. Three people, including me, got a job in my company out of 300 applicants from my university. After starting my job, an older co-worker in my office said; "I can't understand why my company is now "the narrow gate". He said he found it easy to get his job, "I only found a recruitment ad in a newspaper, applied, got this job. Maybe almost all of the applicants at that time could get jobs."

However, people from older generation have experienced other harsh realities. In their youth, Saturday wasn't a holiday. The words and concepts, "abuse of power" and "sexual harassment", didn't exist. More than in modern Japan, older people had absolute power – if a boss said something irrational, young people couldn't object, and had to simply obey him. Now such harsh realities have gone and people work under more favorable conditions. Therefore, people from older generations often think, "modern young people work in such favorable conditions, but they can't get jobs. They must be lazy."

My opinion about Japan's low unemployment rate can be explained through the following example. Miki Watanabe is the founder of a big pub-chain company. The company is notorious for its bad labor conditions. For example, their corporate identity is: "Work 24hours a day, 365days a year, till you die." A worker of this company committed suicide. Her work condition were: 140 hours overwork per month. On her designated "holidays", the company forced her to receive training from 7am, do "volunteer activities" and write a report about the "volunteer activities".

Watanabe, despite being such a notorious executive, was surprisingly elected for the upper diet in Japan. Among people in my generation (under 40 years of age), it was unbelievable. Many people from older generations feel the same way. However, some people from older generations wanted Watanabe to be in power. They thought modern Japanese society needed a severe leader, who says, "Work hard, don't be a spoiled child". In the end, 1 million voters voted for Watanabe, showing support of this work ethic. Clearly, older generations who supported Watanabe participated in the election, however younger people who were against Watanabe did not.

Japan's low unemployment rate compared to other developed countries', never means Japan's economy is in good condition. It means there is a big generation gap in understanding the real possibility of getting jobs in modern Japan and about their voting rates.