Japan’s ultra-low jobless rate masks grim reality

TOKYO: Japanese employers are scrambling to find staff, unemployment is at its lowest level in more than two decades and the labour market is tighter than it was during Japan’s booming bubble economy years.

This should be great news for the world’s No. 3 economy, but analysts are warning not to pop the champagne quite yet because it is mostly due to a shrinking labour force.

This week, government figures showed the jobless rate at 2.8 per cent in April for the third consecutive month and the lowest since 1994.

Another key labour market measurement, the ratio of job offers to job seekers, hit 1.48, meaning there were 148 positions available for every 100 job hunters.

Examples of labour shortages are everywhere. Some restaurants are cutting back their hours because they don’t have enough staff, while delivery services had been forced to trim services citing to a lack of drivers.

A lack of formal immigration is part of the story. Bringing in foreign workers is a tough sell politically, so Tokyo has focused on luring seniors and women into the workforce. But Japan’s population is expected to fall by almost a quarter between 2010 and 2050 to below 100 million.

And over-65 seniors are set to make up 40 per cent of the population from 26 per cent in 2015.

Staff shortages have translated into higher wages in certain sectors, but the broader impact has been more limited. In March, some of Japan’s top firms, including Toyota and Panasonic, announced their lowest wage hikes in years.

Low employee productivity is another issue. Visitors are often shocked by the sheer number of workers in the services sector, many with seemingly little to do. AFP