Japan's Jobless Rate: Updated May 4, 2025.

Japan's jobless rate in FY 2024 falls to 2.5% amid labor shortage

Article source: https://mainichi.jp/english/articles/20250502/p2g/00m/0bu/016000c

Ideas:

No country or economy will ever get 0 percent unemployment as there are always people moving in and out of the workforce, but Japan 2.5 percent seems, on the surface to have good unemployment numbers.

But the 2.5 percent doesn't really tell  the real story as there might be many working contract jobs, many working part-time jobs which can skew the results. Contract jobs and part-time workers might not be getting any of the normal benefits that full-time workers get.

A labor shortage usually benefits workers but again, what kinds of jobs are being offered to those who need a job and or those looking to change jobs in Japan.

Again the numbers might look good with 370,00 more jobs being filled, but what kinds of jobs are being filled. Are they full-time jobs with good benefits that many Japanese households need or are they just contract jobs that pay less and even less in benefits.

The challenge. always is small and midsize companies that are always the last to fill jobs with good workers as many workers of course want to work for the large-name brand companies and or want to work in the major metro areas of Japan.

So the challenge is for the small and midsize companies to pay at or near the same as large Japanese companies to attract the best workers but they usually don't have the resources needed to match the wages of the large companies.

There could be many reasons why 220,000 thousand workers and not just for poor work performance such a company might have experienced low sales or profits for a long time and had no choice but to lay-off workers. 

Some companies maybe couldn't find the workers they needed to do the work the company has to do and so they had to lay-off their remaining workers. 

There could be many other unknown reasons why companies lay-off or fire workers, which is sometimes uncommon in Japan.

For a long time it was almost unheard of for Japanese workers to change jobs, and especially in large companies, but maybe those days are long gone, as the Japanese workforce has become more flexible and more mobile in recent decades.

For a long time there might have been a stigma against changing jobs in Japan, as maybe it was frowned upon as not being loyal to the company that originally hired you. But again, a lot has changed in Japan and workers today are, for the most part,  are looking for better opportunities and better work/life experiences instead of the traditional long work hours of the traditional Japanese company.

The Japanese government has known for a long time that a labor shortage was approaching but maybe hasn't been able to really do anything about it, as the Japanese population has been consistently shrinking with one of the lowest if not the lowest birthrates among advanced countries.

There is always the idea of immigration to help with the labor shortage but there just aren't enough qualified foreign workers yet with good Japanese language skills.

There are always enough workers willing to go to Japan to work but the Japanese immigration system is not set up to handle or allow all the foreign workers that want to work in Japan along with a reluctance to let everyone into Japan to work.

Again whether 2.5 or 2.4 Japan has one of the lowest unemployment rates in the world but again what kinds of jobs are available for workers. In many advanced economies these days contract work, not full-time jobs with good benefits, is becoming more common each year, as companies, globally, are trying to cut costs and please shareholders with better profit returns.

Even at 1.25 jobs for every job applicant is very good in Japan, and maybe, unfortunately, for some workers these might be for small and midsize companies that don't give the same wages as large Japanese companies do.

There seems to be many good jobs in Japan for Japanese workers, but these days maybe Japanese workers have become more picky as they don't want, if possible, the normal traditional job at a Japanese company of long hours and maybe even weekend work.

Of course it would be nice if everyone could get their ideal job but that is not how a market economy works so workers have to make compromises and take the best job they can that might meet their expectations.

The labor situation in Japan is probably not going to change much until there are significant changes in the Japanese workforce.

The birthrate in Japan is not going to change enough to improve the labor shortage, and its the same in many advanced economies these days.

Again the only real solution is to improve the Japanese immigration system that allows more foreign workers to work in Japan. And then there is the need that foreign workers have better Japanese language skills, as Japanese society and most if not all Japanese companies don't have sufficient English language skills.

Japan is not like the EU where you can probably get away with just using English, except for maybe France for everyday work or even surviving in society.

The information and communication sector is probably seeing increases in companies who need workers to handle AI tasks or skills and more companies being digitized for the workplace.

The accommodation and restaurant services sector might be still trying to make up for their huge losses during the pandemic including having to layoff many workers and at the same time having to increase staff due to the huge increase in foreign tourists entering Japan.

Both the retail and wholesale sector and even the lifestyle and entertainment services sector might be experiencing sales and profits decreases due to continued inflation in Japan as Japanese households have cutback on discretionary or extra income spending as inflation has eaten away whatever extra income they have or had, so the don't have or can't spend it on those areas listed that have seen job loses and or not hiring like they used to or need to.

Have a nice day!