Employment Ice Age

Employment Ice Age (Japanese: 就職氷河期, romanized: Shūshoku Hyōgaki) is a term in Japan (the term lost generation is also used) that refers to people who became accustomed to unstable and temporary employment beginning in the 1990s, until at least 2010. This period has particularly affected Gen X (people in their 40s in 2019) and impacted their financial well being, health, outlook, and ability to start families.^[1] Government officials are concerned about developing impacts as their focus has been on the existing explosion of elderly (75+) rather than those too poor to have ever started a family who themselves will be moving into old age largely absent the financial resources other generations had. Government efforts on this matter are deemed far too little and too late and Nikkei writers claim that lawmakers remain unaware of the gravity of the situation.^[1]

Progress[]

Before the bubble[]

In the mid 1970s to 1985, after the 1973 Oil Crisis, the ratio of new jobs given to applicants was between 0.9 and 1 in the Japanese labor market. The ratio of active job openings to applicants was, however, between 0.6 and 0.7.

Due to the Plaza Accord in September 1985, and a cultural appreciation of the yen, the Japanese economy became a bubble economy, led by domestic demand, with a low interest rate policy. Companies native to Japan reached record highs in their stock prices, which led to excessive capital, profit, and employment,making the ratio of new jobs/job offers given to applicants go up by 3 points, to 1.4. In 1989, the Nissei Stock Exchange (Japanese stock market) had reached another high of 40,000 U.S dollars due to the Japanese economy's profits.^[2] This is also where asset prices experienced highs as well, skyrocketing land and house prices.

The bubble economy and its collapse[]

The Bank of Japan, in an effort to combat the economic stagnation in 1989, sharply raised inter-bank lending rates. This caused the figurative "pop" of the Japanese economic bubble, starting the new decade off with an recession not seen since post-war periods. This caused the fall of equity and asset prices, which led to overly-leveraged Japanese banks and insurance companies with books full of bad debt. The financial institutions were bailed out through capital infusions from the government, loans and cheap credit from the central bank, and the ability to postpone the recognition of losses, ultimately turning them into zombie banks.

These banks injected the funds they got from bailouts into what would be zombie funds, saying the funds were too big to fail. However, since the banks could only survive with government bailouts, these funds failed anyway, and so did the banks in the 2000s. This later became one of the reasons for Japanese economic stagnation in the 1990s, and the shrinking of the amount of national banks in Japan to just four. This also kicked off what would be called the Japanese Lost Generation, which in the 1990s were college graduates who couldn't get a job, and thus, suffered the economic consequences of not having a job. Now these same graduates are 40. And they have only been able to find low-paying, part-time jobs due to the extreme influence of the popping of the economic bubble.

The 1990s was the last decade where Japanese birth rates exceeded the death-rates. This may have been due to a bad economy, which meant people could not spend, or get jobs. Despite multiple attempts from the Japanese government, such as economic stimulus and fiscal deficits since 1991. As of 2021 the Japanese economy still remains stagnant. It has only gotten worse due to the COVID-19 pandemic quarantine.

See also[]

•  [ja; ko; zh]
•  [ko]

References[]

External links[]

• The Lingering Effects of Japan’s “Employment Ice Age” Nippon.co
• Japan Times Editorial

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