The impact of the new crown epidemic on the labor market has begun to appear. In Japan, people who were unemployed for more than one year increased by 31% from October to December 2021 to 640,000, an increase of 640,000, reaching a high level since the Lehman crisis. In the United States, labor shortages drive wages up, causing prices to rise further, while Japan contrasts it with it. It is difficult to return to work after long-term resignation, and the power to push up prices is also weak.
The labor force survey of the Ministry of Internal Affairs and Affairs of Japan defines people who have been unemployed for more than one year as long-term unemployed. In Japan, the number of long-term unemployed people peaked in 2010 after the Lehman crisis, and fell to 480,000 from July to September 2018, the lowest level since 1997.
However, the new crown epidemic has caused the economic situation to worsen, with the number of long-term unemployed people from April to June 2021 to 720,000, 1.5 times that of the same period in 2019 before the epidemic. As of October to December 2021, it has seen two-digit year-on-year growth for five consecutive quarters. The Ministry of Internal Affairs and Affairs said, "The impact of 2020, where the COVID-19 pandemic caused economic activity to fall into a sluggish situation, may be reflected in the increase in long-term unemployed people after one year."
Japan's complete unemployment rate (generally refers to the proportion of people with the ability and willingness to work but currently not working) was 2.2% in December 2019, and then rose due to the epidemic and increased to 3.1% in October 2020. As economic activity recovered, it fell to 2.8% in January 2022, but unemployed people began to stay in the labor market due to changes in the economic structure and a huge blow to specific industries.
In addition, there is also the possibility that the unemployment reserve team is increasing. The Ministry of Health, Labor and Welfare analyzed that measures such as employment adjustment subsidies provided by the state have the effect of lowering the unemployment rate by 2.6 percentage points. While avoiding increasing unemployment, there is also a side to keep suspended workers in the company.
Labor survey shows that the number of suspended people who have jobs but have received subsidies and have not actually participated in the work reached 2.11 million in 2021, an increase of 330,000 compared with 2019 before the epidemic. The number of people planning to change jobs increased by 460,000 compared with 2019 to 8.46 million, but the number of people who changed jobs in 2021 was only 2.88 million, a decrease of 630,000 from 2019. Some companies have personnel who do not participate in the work, and the corporate department does not fully meet the job-changing needs.
In addition to the above situation, in Japan, where the labor market is more rigid than the United States, it will be difficult to find a job once it leaves the workplace. Among the long-term unemployed people in 2021, the number of resignations caused by personal reasons has increased to 1.2 times that of before the epidemic, and the number of non-active resignations such as work unit reasons has increased to 1.8 times.
Professor Kio Ishimizu from Kyoto Tane University analyzed that "In the context of the changes in the industrial structure caused by the new crown epidemic, there are resignations who are very difficult to match the new job." He also pointed out that "the government must also continuously expand its countermeasures."
The euro zone is similar to that in Japan. The number of long-term unemployed people from July to September 2021 was 5.26 million, an increase of 4% over the same period in 2019, which is lower than that of Japan. However, long-term unemployment accounts for 42% of the overall unemployment, higher than Japan (36%).
The situation in the United States is different. People who have been unemployed for more than 52 weeks have begun to surge since the COVID-19 pandemic one year ago. By June 2021, it has increased to 3.7 times before the epidemic, an explosive increase and then turned to a decrease. The smooth economic recovery and a flexible labor market have become the east wind. There have been people in the United States who voluntarily resigned in order to pursue better treatment. Some experts call this situation the "big resignation era."
On the other hand, the serious increase in the non-labor population.
Office workers on the streets of Tokyo
From the perspective of the labor participation rate that shows that the proportion of labor market participants to the total population, compared with before the epidemic, Europe is currently basically the same, Japan is down 0.1 percentage point, while the United States fell 1.1 percentage point as of February 2022, which was significantly worse. In the United States, the working population has decreased by 590,000 compared with before the epidemic, while the non-working population has increased by 4.29 million. Rising wages will lead to further inflation due to the product effect of active resignation and labor shortage.
In Japan and the United States, the increase in long-term unemployed and non-working population will hit post-epidemic consumption through a decline in income. There is a need to achieve sustainable economic growth and promote the recovery of labor demand.
Nikkei Shimbun (Chinese version: Nikkei Chinese website) Matsuo Yohei
Copyright statement: All rights reserved by Nikkei Shimbun. Reproduction or partial copying may not be made without authorization. Violators will be prosecuted.
Nikkei Chinese website https://cn.nikkei.com
