Japan’s job availability ratio in 2020 logged the sharpest drop since 1975, while the average unemployment rate marked the first rise in 11 years, highlighting the magnitude of the fallout from the coronavirus pandemic on workers, government data showed Friday.
The job availability ratio fell 0.42 point to 1.18, the fastest pace since a 0.59 point drop in 1975 recorded in the wake of the 1973 global oil crisis, according to the Health, Labor and Welfare Ministry. It means there were 118 job openings for every 100 job seekers.
The pace of decline surpassed the 0.41 point slip logged in 2009 following the global financial crisis, with the figure hitting the lowest level since 1.09 in 2014, the labor ministry said.
The annual jobless rate stood at 2.8% in 2020, up 0.4 percentage point from the previous year to log the first increase since 2009, when it climbed 1.1 points to 5.1%, the Internal Affairs and Communications Ministry said.
The number of unemployed rose 290,000 to 1.91 million, also the first increase in 11 years. The number of people in work fell 480,000 to 66.76 million, down for the first time in eight years.
“The data showed a continued significant impact from the coronavirus pandemic (on the labor market). We will closely monitor developments,” said Ryota Takeda, minister of internal affairs and communications.
Of those with jobs, 20.90 million were nonregular, or contracted, employees, falling 750,000 from the previous year and down for the first time since comparable data became available in 2014, amid an increase in layoffs and non-renewal of work contracts by companies hit by the pandemic.
Until the pandemic, the number of nonregular workers had been on the rise in Japan with more women and older people entering the labor market, with the country facing severe manpower shortages in recent years amid the rapid aging of the population.
Of the people in work, 35.39 million were regular workers, rising 360,000 from a year earlier and up for the sixth year in a row.
As another indication of the virus impact, the number of furloughed employees surged by 800,000 to 2.56 million, a record high since comparable data became available in 1968. The annual growth was also the steepest ever.
By sector, the number of workers in the services industry including hotels and restaurants declined by 290,000 to 3.91 million, by far the sharpest drop among all industries, as fears of virus infections made consumers hesitant to dine out and take trips.
The pandemic took a heavy toll on the world’s third-largest economy throughout last year.
The government’s first state of emergency, declared nationwide over the virus from April to May with requests for people to stay home and nonessential businesses to suspend operations, triggered the country’s worst recession on record.
In the April-June period, the Japanese economy contracted an annualized real 29.2% from the previous quarter.
Although the jobless rate in Japan is still low when compared with other major economies, the outlook for the employment situation remains uncertain after Prime Minister Yoshihide Suga declared the second virus emergency earlier this month for Tokyo and 10 other prefectures following a resurgence in infections since mid-November.
On the back of the labor shortages in recent years, the 2019 average jobless rate stood at 2.4%, the lowest level since 1992. But with the virus spread last year, the monthly jobless rate began to worsen gradually, reaching the 3% level in August for the first time in over three years.
“The results showed that the employment environment worsened remarkably last year in the worst economic slump in the postwar period amid the coronavirus infections,” said Munehisa Tamura, an analyst at the Daiwa Institute of Research.
But Tamura said the deterioration of the jobless rate was not as serious as it might have been, “possibly because business operators tried to maintain their work forces as much as possible to prepare for the lifting of the (first) virus emergency, with the support of government subsidies.”
For 2021, Tamura predicted the labor market figures would basically improve due to the structural manpower shortages but would still depend to a large degree on the virus situation.
In December alone, the unemployment rate stood at 2.9%, with the job availability ratio hitting 1.06, both unchanged from November.
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