Photographer: Tomohiro Ohsumi/Bloomberg

Jump in Job Loss Among Men in Japan Clouds Employment Picture

  • Number of employed men 25-44 falls to lowest level in 48 years
  • Behind the trend is lack of retraining, manufacturing drop-off

A growing number of men in their prime working years are joining the ranks of Japan’s long-term unemployed -- unable or unwilling to adapt to a shifting labor market as opportunities continue to shrink in areas like manufacturing.

Though Japan has a famously low jobless rate, at 3.1 percent in June, hidden in the data is the fact that long-term unemployment among men ages 25-44 has jumped five-fold since the early 1990s after Japan’s economic bubble burst.

There were 14.7 million male workers in the 25-44 age group in June, the lowest level in 48 years, even amid an overall increase in the workforce, according to the statistics bureau.

This contrasts somewhat with increasing employment rates for Japanese women. Yet while women are showing more capacity to adapt, they are not necessarily winners either, as they are more likely than men to hold part-time jobs with relatively low pay and fewer benefits than for full-time, regular positions.

‘Hidden Problem’

Though Japan’s jobless rate is the lowest since 1995, the trend of rising unemployment among men in their key working years is worrisome for Prime Minister Shinzo Abe, who is trying to resolve a stubborn labor shortage. It’s especially problematic because Japan’s corporate structure makes it difficult to move among companies.

“This is a hidden problem in Japan’s economy,” said Akane Yamaguchi, an economist at Daiwa Institute of Research, who published a report on the issue in April. “Abe’s government has to fix it as this is the generation supposed to be in the prime of their working life.”

Behind this is a further decline in the manufacturing base -- the number of manufacturing jobs dropped to 10.3 million in June from 11.7 million a decade ago while the medical, health care and welfare sector added 2.7 million jobs, according to the statistics bureau. Employment in the service sector has risen to 74 percent as of 2014, according to the latest report by the Cabinet Office in December.

“There aren’t really any training programs offered for them so once they missed the opportunity, it gets very hard for them to find a job,” Yamaguchi said. “This is a vicious cycle.”

Bank of Japan researchers wrote about the trend in a report in March, saying unemployment of more than a year is “biased heavily” toward men ages 25 to 44. Analysts found that the number of men without jobs in this age range climbed to 310,000 in 2014, about five times more than in the 1990s. Potential reasons include men’s preference to find work in their same industry and a shift of jobs from manufacturing, the BOJ report showed.

Rising unemployment among these men could exacerbate Japan’s demographic challenges -- a rapidly aging population and a stubbornly low birth rate -- that are weighing on economic growth. Only 39 percent of men in their 20s want to get married, a clear contrast with 67 percent three years ago, according to a survey by Meiji Yasuda Life Insurance released in June.

The most significant reason men gave in the survey for staying single: They don’t have enough income to support a family.

    Before it's here, it's on the Bloomberg Terminal.