Tokyo, (UrduPoint / Pakistan Point News – 30th Jun, 2020 ) :Unlike most major global powers, Japan has been spared an explosion in unemployment during the coronavirus pandemic, despite the world‘s third-biggest economy suffering its first recession in more than five years.
Economists forecast the unemployment rate in Japan will hit four percent by the end of the year, as the tourism and hospitality sectors suffer from border closures and people staying at home because of the virus.
Many countries would welcome an unemployment rate of “only” four percent, with the luxury of having more jobs than jobseekers.
So why has Japan‘s rate stayed so low? One major explanation lies in the country’s dearth of workers owing to an ageing population.
Japan has the world‘s only “super-aged” society where more than 28 percent of people are 65 and over.
This means firms are reluctant to lay people off even during a recession, as they fear they will have few options to recruit when the crisis passes.
“Therefore, even if an economic shock happens, generally speaking, it does not directly lead to an immediate and sharp spike in unemployment,” he told AFP.
And some critics say the apparently healthy unemployment data belies the daily reality for millions — especially the 40 percent of the workforce on temporary or part-time contracts.
The government launched a massive economic package that includes funds to help businesses keep employees on — 4.2 million are on this furlough system, according to government data, some six percent of the workforce.