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Japan’s job availability ratio in FY2020 sees largest decline in 46 years

Japan’s job availability ratio in FY2020 sees largest decline in 46 years

03-May-2021 Intellasia |
Japan Today |
5:02 AM

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Japan’s average job availability ratio in fiscal 2020 posted the largest decline in nearly half a century, with the unemployment rate up for the first time in 11 years, reflecting the serious impact of the coronavirus pandemic, government data showed Friday.

The job-to-applicant ratio for the year ending in March dropped 0.45 point to 1.10, the sharpest decline since a 0.76 point drop in fiscal 1974 following the 1973 global oil crisis, according to the Ministry of Health, Labour and Welfare. It means there were 110 job openings for every 100 job seekers.

Down for the second straight year after falling 0.07 point in fiscal 2019, the latest ratio was the worst showing since 0.97 marked in fiscal 2013.

The average jobless rate, released by the Ministry of Internal Affairs and Communications, rose 0.6 percentage point from fiscal 2019 to 2.9 percent, registering the first increase since it climbed 1.1 point to 5.2 percent in fiscal 2009 in the wake of the global financial crisis.

The number of unemployed people increased 360,000 to 1.98 million, and that of people in work dropped 690,000 to 66.64 million.

Nonregular workers decreased 970,000 to 20.66 million, the first fall since comparable data became available in fiscal 2014. They bore the brunt as more firms, especially in the services sector that is highly dependent on part-time employees, were forced to lay people off and refrain from offering contract renewals during the pandemic.

Before the public health crisis, Japan had seen the number of nonregular workers increasing, with many women and elderly people entering the labour market to help mitigate severe labour shortages due to the rapid aging of the country’s population.

The domestic employment situation began to worsen significantly around April last year, when the government declared its first state of emergency over the virus, covering the entire country for about a month through mid-May with requests for people to stay home and nonessential businesses to suspend operations.

The measure led the world’s third-largest economy to contract an annualised real 29.3 percent in the April-June period in 2020 from the previous quarter, its worst recession on record.

“The first virus emergency contributed most to the annual figures,” said Yuriko Shimanaka, an economist at Mizuho Research & Technologies.

“The employment indices had been at quite good levels, but they began to deteriorate around the latter half of fiscal 2019 due to trade friction between the United States and China, and the fallout from the pandemic accelerated their pace,” she said.

In March alone, the unemployment rate was 2.6 percent, down 0.3 point from February, with the job availability ratio logging 1.10, up 0.01 point.

The monthly jobless rate was unexpectedly low as many analysts had forecast it to remain almost flat or even to increase, as a large number of restaurants and bars have been asked to close early with the virus spread showing no signs of abating.

“The jobless rate was down, but I think the situation has not been necessarily improving,” Mizuho’s Shimanaka said.

She added the March unemployment rate fell due partly to an increase of 240,000 in the non-labour force population from February, the first rise in six months, reflecting a growing number of people not seeking work amid the pandemic.

With a fourth wave of virus infections sweeping the nation, prime minister Yoshihide Suga declared last week the country’s third state of emergency over the virus for Tokyo and the western Japan prefectures of Osaka, Kyoto and Hyogo, effective until May 11.

Shimanaka predicted the unemployment rate will worsen again due to the fresh emergency, possibly reaching 3.5 percent around September, while the job availability ratio would hover around 1.0.

https://japantoday.com/category/business/update1-japan‘s-job-availability-in-fy-2020-sees-largest-decline-in-46-yrs

Category: Japan

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This is not a CAPTIS article. Originally, it was published here.