Much is being made these days of the possibility that Europe and the U.S. are going the way of Japan in terms of the risks of deflation and the freezing up of the financial sector complete with zombie banks. But before we leap to these sorts of conclusions lets examine a few facts about Japan and its economy. First off unemployment in Japan has historically been much lower than in either Europe or North America. There are certain problems with comparison since it is a long standing tradition in Japan that workers once over 55 take less responsible positions or retire earlier from the workforce than comparable workers in North America.
But if we consult the official unemployment data which is given by age cohort for unemployment since 1970 and for total unemployment back to 1953 we discover that Japan has on the whole very low unemployment. In fact during the 1950s and 1960s the monthly unemployment rate never rose above 2.7 % and was usually below 2 %. During the period since then unemployment has not risen above 6.3 % and for much of the period was below 5 %.
Unemployment is higher among the age group 15-24 and somewhat higher among the group 55-64. Among the 15-24 year olds during the past 41 years monthly unemployment peaked at 10.8 % in March 2003. In June 2010 it also reached 10.6 %. But for most of the time period from 1970 to 1999 it was below 8%. From 2000 on it has worsened.
Nevertheless, although elevated youth unemployment in Japan is still well below the unemployment rate for young people in North America and Europe. The rate for unemployed people between the age of 15 and 24 in Canada is 14.1 % for July 2011 (source:Labour force survey Statistics Canada) . The rate for unemployed young Americans 16-19 year olds is 25.1%; 20-24 year olds 14.9 % and 25-34 year olds 9.5 % .(source: U.S.Bureau of Labour Statistics) .
Unemployment rates for young people in Europe are outside of Germany, the Netherlands and the Scandinavian countries except for Sweden very elevated. Some examples; the rate of unemployment among 15-24 year olds for the European Union as a whole at the end of 2010, 21 %. Germany 9.0 % Greece 36.4 %; Spain 43.3 %; France 23.2 %; the U.K.20.3 %;Italy 28.4 %; Norway 9.0 % .
On the whole Japan is doing relatively well, at least as far as unemployment is concerned.
haroldchorneyeconomist 