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The unemployment rate in Japan has been an important issue. It cannot be treated as a critical minimum because in absolute terms it means a huge number. In an economy where the cost of living (including housing) is enormously large, an unemployment rate of around 3% does pose a matter of serious concern. The economic growth does not seem to be sustainable and its volatility has tremendous impact on employment aspects. Further, the lack of regular employment for many including the youth is a major problem because given the scope of limited skill formation in these jobs, the possibility of upward mobility is rather rare. Improving labor market conditions are necessary for wage growth, though the country needs to address the issue of a mismatch between available jobs and seekers.
Sectors that added more jobs in the beginning of this year than a year ago included health and welfare, wholesale and retail, and finance and insurance. The manufacturing sector witnessed a drop. Here is the catch. Japan needs to revive its manufacturing sector and industrialization of workforce, which is a must.
In order to enhance employment growth in the manufacturing sector, Japan has to lay focus on labor intensive goods. It is difficult for Japan to compete with China as Chinese products are far cheaper compared to the Japanese cost of production. But Japan is quality conscious. Even if Japanese products will be dearer than the Chinese products, the "quality" itself will create its own demand, particularly in the international market. In fact, the small and medium enterprises, manufacturing goods largely for the domestic market, must target the export market. That the income levels of at least certain sections of the population in developing countries have increased significantly suggests a considerable number having become quality conscious. Take the example of India. The middle class has experienced a major increase in real income over the past 10 years or so. Even the lower middle class households have diversified their consumption of goods and services. The kitchen, living rooms and the other household products have witnessed a dramatic change with the introduction of a wide range of products. They are now quality conscious and would definitely value the Japanese products over the Chinese goods which are fragile. The growing consumer class is forced to buy Chinese goods because they do not have options. Paying a few more rupees for quality products is certainly not disheartening for them.
Instead of exporting only skill intensive and technology intensive products Japan has to think of diversifying its export market. The former helps Japan earn huge foreign exchange income but enhancing employment growth is also a major consideration for Japan. So why only automobiles, why not the kitchen accessories as well? The involvement of the small and medium enterprises (in addition to the big and reputed ones) in the export market is instrumental to Japan’s inclusive growth. Sluggish employment growth and wage growth are definitely a major cause of slow population growth.
Joblessness in extreme terms can lead to homelessness. While the Japanese government has to work out important strategies for fructification of these considerations, government in developing countries must also realise that such trade arrangements with Japan will work in their favor as well, because import of quality products will compel the domestic firms to become more competitive.
In aging societies, the shortage of young labor can be a major problem in the long run. So how to pursue production of labor intensive goods? How to tap the unutilised labor in the economy? Here one needs to contemplate upon policy initiatives which can play a crucial role in raising the female labour force participation. In Japan the enrolment of women in tertiary level education is pretty high, yet the labor market participation in comparison to that is on the low side. What constraints women from accessing jobs is a major research question. How the social and practical constraints can be overcome by building support structure and new institutions will have to be the policy focus in the coming days. After all, social barriers can always be mitigated through effective policy initiatives.
© Japan Today
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sangetsu03
This really is a catch, because Japan is a remote island, far from the major markets in America and Europe. What's more, Japan completely lacks all material and energy resources for manufacturing, and must import these to fuel it's industry.
Japanese products are known for their quality, but this was not the case during Japan's strongest boom years. Japanese goods sold well because they were the cheapest goods on the market, not the best made. In the current era where people get a new phone every 18 months to 2 years, a new car every 3 or 4 years, and a new television every 3 or 4 years, quality is less a concern, because even poor quality products will last that long. Cost performance is the number one issue consumers have, that is, to get the best product at the lowest price. The luxury market, which demands the highest quality (while charging the highest prices) is not large enough to support a huge industry or workforce.
One must also not forget the reasons that Japan rose to industrial prominence. First, the second war had leveled the world's economies and industries, with the exception of America. Europe was rubble, England was licking it's wounds, the developing world was still more or less in the 19th century in terms of industry and technology. As an American protectorate, Japan received very favorable trade deals with America. America did not want to support Japan economically for an indefinite period of time, and assisted Japan very much in post war industrialization. The first Japanese industry to get off the ground was the optical (camera) industry, and this was made possible when America gave Japan wartime machinery and technology to get started. Next, the war had taught Japan and the Japanese economic efficiency; to get the most amount of product for the smallest amount of material, labor, and energy spent. Lastly, Japan, rising out of generations of working class poverty which dated to prewar years, had very low labor costs, and a cheap national currency, which Japan had the freedom to manipulate, so as to keep the value low, and help push down labor costs.
Japan enjoys none of these advantages any more. The yen can no longer be blatantly manipulated to keep it cheap. China also enjoys nearly free trade with America, as do many other growing industrial economies. And Japan's business and industry is no longer efficient, it is anything but.
The advantages that Japan enjoyed for decades which made it an industrial super power no longer exist. It would be far easier for material-rich countries to increase their manufacturing capacity. Why should America send iron, nickel, gas, and oil to Japan to produce finished goods when America could simply produce them at home? In the the past they could do it because Japan could use these to produce a good finished product for substantially less that it it could be produced in America. But his is no longer the case. China, Vietnam, Thailand, and half a dozen others can make good products more cheaply than Japan, even Japan now produces the greater part of it's products in these places.
If Japan, or any other country wants to revive it's manufacturing and industry, it first has to look at improving it's economic efficiency. Japan is over-regulated, overtaxed, overstaffed, over-tariffed, and overpriced, so as a result, the economy underperforms.
vinarius@pm.catv.ne.jp
Japanese have to get out of their mind that anything cheap is good or montainai. THE REASONS ARE, they are causing their own producers of good quality products from dying. The Japanese must buy their own products before they think abt export. How can any one living in this country believe that Japanese products are good when as the 3rd richest country in the world, they cannot even afford to buy their own products ???.70% of Japanese families eats are guru guru sushi ( the sushi with electric belt ).something is wrong in this country, maybe, they are still living in the after 2nd world war times. If one go shopping in big camera, 70% of things are make in china, with Japanese prices. THIS IS NOT CORRECT. WHY ARE THINGS MADE IN JAPAN BY JAPANESE EXPENSIVE ???.Why can't the Japanese make the correct prices for things that they produced so that their own people, the Japanese can afford Japanese products. Stand on yr own two feet first before U try to borrow someone else feet.
qwertyjapan
There aren't many truths in this opinion piece.