The structural problems of the Japanese labor market

Due to the impossibility of achieving “perfect competition” in the labor market (as well as in other markets), which, in theory, should balance the ratio between various components of labor supply and demand through the price mechanism (because of the imperfection of market itself and as a result of the state’s desire to regulate its functioning), various kinds of imbalances and inconsistencies constantly arise here. Thus, under a low level of general unemployment, structural unemployment increases, indicating the discrepancy between the requirements of companies to the quality of the workforce and the professional and qualification structure of workers entering the labor market. As a result, despite a high demand for labor, the level of filling of open vacancies averages no more than 30 %. On the other hand, a rather high level of dismissals of workers (15-15.5 %) indicates the existence of a gap between their expectations regarding work and the actual conditions in which they find themselves. This problem is especially acute in the youth segment of the labor market, indicating that the employment model of Japanese youth, which was formed in the first postwar decades, is increasingly diverging with the needs of young people and the needs of the Japanese economy. The significant differences in the ratio of labor demand and supply between different sectors of the economy, as well as between enterprises of different sizes, have acquired an almost stagnant nature, indicating low mobility of labor force. Finally, the discrepancy in the dynamics of labor productivity and wages became one of the distinguishing features of the last decades. It was formed due to the peculiarities of the dynamics of both indicators in this period, which, in turn, were formed under the influence of a whole range of factors of economic and socio-cultural nature. The imbalances and inconsistencies existing in the Japanese labor market indicate its lack of flexibility and mobility, and this, in turn, impedes a more efficient use of the country's main resource for economic growth - its labor force.

labor market, labor force, structural unemployment, labor productivity, wages, dismissals, vacancies

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