If Japan's Lost Decade Is Any Lesson, America's Youth Are Completely Screwed

Business Insider ^ | 10/20/2012 | Rob Wile

[SeekAndFind]

In the mid and late 90s, Japan experienced a deep recession that was mainly rooted in a collapse of land and property prices and the aftermath of sovereign debt crises in other East Asian countries.

Riva Fromovich points us to a 2000 study by The University of Tokyo's Yuji Genda of what happened to Japanese youth during the recession. It is ugly.

First, the hiring rate of new graduates relative to the initial number of employees, using human resource stock variables as explanatory variables in a regression analysis:

Click to enlarge.

Yuji Genda

Genda:

The hiring rate of new graduates relative to the initial number of employees is significantly lower at establishments with a higher share of employees aged forty-five or older. In particular, high school graduates had greater difficulty finding full-time jobs in large establishments with a higher share of older employees. There were also fewer college graduates recruited by these establishments. Those with nonscientific majors (bunkei in Japanese) were least likely to be hired. The regression model can be applied to data from 1991 to 1996, and the negative and significant coefficient on the middle-aged and older employee ratio is observed in every year. 

 Next, job growth rates (declines) per capita by age — they basically collapsed for young folks:

Yuji Genda

Finally, job growth rates by age and sector. The drop off for younger workers is especially noticeable at large firms:

[3Fingas]

If this is true of their very well educated workforce imagine how our poor to mediocre graduates from public schools will do. Any one of their average math and engineering college graduates would be consider high-performing in the skills department over here.

[Incorrigible]

Bump

[Vince Ferrer]

Japan and the Exhaustion of Consumerism

[rbg81]

Those with nonscientific majors (bunkei in Japanese) were least likely to be hired. ---------------------------------------------------------- "Bunkei" (bunk) is a good term for non-scientific majors anywhere.

[PGR88]

bump

[Brian Kopp DPM]

The basic premise of the article is wrong.

In the mid and late 90s, Japan experienced a deep recession that was mainly rooted in a collapse of fertility. Period. Demographics is destiny.

Now what are the implications for America’s youth from THAT reality?

[Mr. Jeeves]

Well, the chart explains why they couldn’t get jobs - they are all dummies. :)

[BfloGuy]

In the mid and late 90s, Japan experienced a deep recession that was mainly rooted in a collapse of fertility. Period.

That's very true.

I think the article is a poor attempt at using statistics to prove a predetermined opinion. But, it did occur to me that the drop in fertility might have been caused, in part at least, to an increase in child-rearing expenses as well as a decrease in perceived economic opportunity.

I suspect that's played a role in Europe's and America's dropping birth rates, too.

[BMCinSC]

Totally misinformed article. Japan and the USA are not that similar. Earlier posts on fertility are part of their problem. The other issue is their immigration policy. Another is their culture to not admit mistakes and not fix them. Further, there is practically no risk taking or entrepreneurialism in the country (due to long term tax and business policies). I could go on and on, but I need to finish packing for my business trip to Japan (yet another) to try to convince my employer (who is a Japanese company) to consider my proposals that will address their entrepreneurial / risk taking shortcomings.

[STD]

Japan has done one thing perfectly; the Japanese don’t allow Moslems to immigrate to Japan.

[yefragetuwrabrumuy]

I think the reality for many in the future will not be to get “productive” jobs, but “reductive” employment.

That is, a productive track is one of getting a good job for many years, getting married, having and raising children, then eventually retiring.

But this will not be the reality for people on the reductive track. To start with, they have little or no chance to get a job they can support themselves with, much less a spouse and children. So they write off ever having a spouse or children.

But this does not mean they are worthless. Instead there are many “room and board and stipend” jobs they can take that if they are frugal, they can lead reasonable lives.

For example, they can act as a servant-caregiver to older people who have money. In exchange for their work they have a relatively nice place to live, food, their own health care, transportation, etc.

It could take a while, but eventually society could recognize that such people are performing a useful role.

[ex91B10]

My kid sister is a chemestry prof at one of the military acadamies. She says her freshman have no idea about things my sister learned in high school chemestry back in the early 80’s.

[dennisw]

Good link. Charles Huge Smith comes up with unique insights.