Why Japan’s Jobless Rate Is Just 2.6% While the U.S.’s Has Soared

In recent decades, companies have tried to gain some flexibility by increasing the ranks of “non-regular workers” — employees on short-term contracts who work for lower wages and have less job security.

In times of crisis, such workers have been let go in large numbers. During the 2008 financial crash, these workers, who currently account for about 40 percent of the work force, were the first to lose their jobs. The pattern has held during the coronavirus pandemic, with 970,000 non-regular workers losing their jobs in April, according to government data.

Female workers have borne the brunt of the job losses. Since Prime Minister Shinzo Abe took office in 2012 and introduced an effort, known as “womenomics,” to elevate women in the labor force, Japan has achieved one of the highest female work force participation rates in the world. But more than half are irregular workers.

“Females are always sacrificed in these situations,” said Ayako Fujita, an economic analyst at J.P. Morgan. She said she worried that the current downturn could set back recent progress made by women in the workplace.

In the months ahead, the unemployment rate is likely to rise further as Japanese companies, particularly in the service industry, cope with the pandemic’s fallout. The real test of the system will come in September, when the government wage subsidies — which are set to last far longer than similar assistance in the United States — run out.

Article source: https://www.nytimes.com/2020/06/20/business/japan-unemployment.html