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The Current Employment Situation in Japan

Japan Heads toward Structural Labour Shortage
The employment situation in Japan took a nosedive in the recession following the collapse of Lehman Brothers in September 2008. Over the two years of 2009 and 2010 the full unemployment rate (annual average) soared from 4.0% in 2008 to 5.1%, the highest level in a decade.
After 2012 the employment situation improved as a result of the economic recovery, with the unemployment rate falling substantially to 4.0% in 2013 and 3.6% in 2014. Since Japan’s structural unemployment rate is said to be somewhere in the upper 2% to lower 3% range, the present employment situation can be described as being in quite good condition, albeit not going as far as full employment. Although the economy supporting this good employment situation registered a real growth rate of 1.6% in 2013, in 2014 it recorded zero growth after a hike in the consumption tax dulled domestic demand. This economic downturn has had almost no impact on employment, however, so it can be said that the labour market is in a tightened situation uninfluenced by the economic cycle. This tightening of labour supply and demand has been influenced by Japan’s population decline. The labour force population aged from 15 to 64 years declined by 1.56 million persons from 60.47 million in 2010 to 58.91 million in 2014. In particular, the 25-34 age group decreased by 1.22 million persons over this period. By gender, the number of men dropped significantly by 1.51 million and the number of women by 60,000.

Number of Employed Persons Increases, but Quality of Employment Is Problem
Amid this decline in the labour force population, the number of employed persons, excluding directors, increased by 1.11 million persons from 51.38 million in 2010 to 52.49 million in 2014. Although the number of employed persons has risen, however, it must be said that the quality of employment is a problem. While the number of regular staff and employees declined by 870,000 persons from 33.74 million in 2010 to 32.87 million in 2014, the number of nonregular staff and employees, such as part-time and dispatch workers, rose by 1.99 million persons to 19.62 million in 2014. The ratio of nonregular staff and employees increased from 34.4% in 2010 to 37.4% in 2014. By gender, the nonregular ratio was an extremely high 56.6% for women and 21.7% for men.
In the October-December 2014 period the number of working people in Japan was 63.73 million, of whom the number of employed persons was 56.37 million and the number of employed persons excluding directors 52.93 million. Of the number of employed persons excluding directors, the number of regular staff and employees was 32.90 million and the number of nonregular staff and employees 20.03 million, giving a nonregular ratio of 37.9%. Of the nonregular staff and employees, part-time workers accounted for the highest number at 9.62 million, followed by temporary workers at 4.18 million and dispatch workers at 1.29 million.
Part-time and temporary workers generally have unstable employment. They work for short periods of two to three months, their working hours are often shorter than those of regular staff and employees, and their wage levels are low as well. According to a wage report of RENGO (Japanese Trade Union Confederation), compiled on the basis of a survey conducted by the Ministry of Health, Labour, and Welfare, the hourly wage of part-time workers in the wholesale and retail industry in 2013 was 964 yen, which was 55.2% of the hourly wage of ordinary women workers (that is, women workers excluding short-time workers) and just 38.4% of the hourly wage of ordinary men workers. Moreover, the hourly wages in this comparison were calculated on the basis of the monthly wage. When bonuses are included, the gap widens even more.

Note: Employed persons are persons employed by a company, organization, government office, self-employed business, or private household and receiving a salary or wage and directors of a company or organization.

Trends in Labour Force Population by Age Group
(10,000 persons)
Year Total 15-64 years  
15-24 years 25-34 years 35-44 years 45-54 years 55-64 years 65 years or over
Source: Ministry of Internal Affairs and Communications, Labour Force Survey
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