The decline in Japan's average job availability ratio in fiscal 2020 was the largest in nearly half a century, with the unemployment rate up for the first time in 11 years, reflecting the serious impact of the COVID-19 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 recorded following the 1973 global oil crisis, according to the Health, Labor and Welfare Ministry. The ratio means there were 110 job openings for every 100 job seekers.
Down for the second straight year after falling 0.07 point the previous fiscal year, the latest ratio was the worst showing since 0.97, marked in fiscal 2013.
The average jobless rate, released by the Internal Affairs and Communications Ministry, stood at 2.9%, up 0.6 percentage point from fiscal 2019. The latest figure shows the first and the largest rise since fiscal 2009, when it jumped 1.1 points to 5.2% in the wake of the global financial crisis.
The number of unemployed people increased by 360,000 to 1.98 million, while the number of people in work dropped by 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, which is highly dependent on part-time employees — were forced to lay people off and stop renewing contracts during the pandemic.
Before the public health crisis, Japan had seen the number of nonregular workers increasing, with many women and older people entering the labor market to help mitigate severe labor shortages due to the rapid graying of the country's population.
The domestic employment situation began to worsen significantly around April of last year, when the government declared its first state of emergency over the novel coronavirus. The state of emergency was in place across the while country for about a month through mid-May, requesting that people stay at home and for nonessential businesses to suspend operations.
The measure led the world's third-largest economy to contract an annualized real 29.3% in the April-June period in 2020 compared with 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%, 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, with a large number of restaurants and bars having been asked to close early and there being no signs the spread of the virus was abating.
"The jobless rate was down, but I think the situation has not necessarily been improving," Mizuho's Shimanaka said.
She added that the March unemployment rate fell partly due to an increase of 240,000 in non-labor 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, last week Prime Minister Yoshihide Suga declared the country's third state of emergency over the virus for Tokyo and the prefectures of Osaka, Kyoto and Hyogo, effective until May 11.
Shimanaka predicted the unemployment rate would worsen again due to the fresh emergency, possibly reaching 3.5% around September, while the job availability ratio would hover around 1.0.
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