Japan’s job availability ratio increased for the sixth consecutive month in June, indicating an increase in hiring across industries, according to data released on Friday.
The jobs-to-applicants ratio climbed to 1.27 from the previous month, indicating that there were 127 job openings for every 100 job seekers in Japan, The Mainichi reported, citing data from the Japanese labor ministry.
The hotel and restaurant industry was doing particularly well with a 30.9 percent increase in job openings compared to 2021, due in part to the loosening of border controls for international travelers to Japan.
The unemployment rate remained unchanged at 2.6 percent in June, although the seasonally unadjusted number of unemployed people decreased by 210,000 from the previous year to 1.86 million people.
In its annual report on the economy and public finances, the Japanese government said that local businesses must raise wages in tandem with price hikes.
“To get [the country] out of deflation, it is vital that nominal wages rise in line with price increases and growth in labor productivity,” the report stated, according to Kyodo News.
Shrinking Working-Age Population
Japan will need to boost the number of foreign workers to 6.74 million by 2040 to sustain average annual economic growth of 1.24 percent, a group of Tokyo-based think tanks said in February 2022.
The think tanks, which include a research arm of the Japan International Cooperation Agency, projected that Japan would lose more than 10 percent of its domestic workforce over the next two decades.
Japan’s population peaked in 2008 and has declined since then to about 125 million due to the nation’s low birth rate, and the working-age population is shrinking even more quickly due to aging, researchers said.
According to the ASEAN+3 Macroeconomic Research Office (AMRO), Japan’s working-age population dropped from 87 million in 1993 to 75.3 million in 2018, resulting in a severe labor shortage in the country’s economy.
“Aging population, coupled with a low fertility rate, results in a declining working-age population. This not only hurts a country’s growth potential but also affects negatively Japan’s fiscal sustainability in social expenditure,” AMRO said in a 2019 report.
Reuters contributed to this report.