Even after three years of trying, Japanese Prime Minister Shinzo Abe doesn't seem able to get his economic program on the fast track. Just as one part of the economy looks better, another falls back into the decline that has dogged Japan for a quarter-century.
Consider, for example, his April 2013 "womenomics" initiative - a part of his broader "Abenomics" program - designed to get more women into jobs in order to spur Japan's moribund economy. One might argue it has been a success: According to the Organisation for Economic Co-operation and Development (OECD), which groups together the world's developed economies, Japan's female labor-participation rate has risen to 70.1 percent for working-age women, up from 62.7percent in 1997 - on par with the United States. IMF Managing Director Christine Lagarde has championed Abe's focus on increasing the role of women in the workforce, and U.N. Women Executive Director Phumzile Mlambo-Ngcuka has praised the initiative.
But in Japan, no good deed goes unpunished. Even as the percentage of women in the workforce has risen, male labor participation has been declining, which acts as a brake on economic growth. According to the OECD data, the participation rate for men ages 25 to 64 has continued its steady slide of the past 20 years - falling to 92.9 percent in 2014 from 94.8 percent in 1997. The decline has been especially severe in the key 25-to-29-year-old age group, which has fallen to 93.6 percent in 2014, the most recent year for which data is available. "Especially for young males, the labor participation rate is weak. This reflects discouragement over finding a good job," said Tokyo-based Deutsche Securities economist Kentaro Koyama. "Around 2000, companies wanted to protect older people and were hesitant to hire new graduates. This has continued to have an impact," he said.
And even with the increase in female participation, the overall workforce continues its long-term slide as the population ages. The current total labor force of 66 million is actually smaller than it was in 1993 and is below the peak of 68 million reached in 1998. With productivity levels in Japan stagnant, fewer workers means less economic activity.
This issue shows how difficult it has been for Abe and Japan's policymakers to get the economy moving again, 25 years after the famous bursting of the asset bubble in 1990. As one area seems to show promising signs, bad news comes from elsewhere. For example, the jobless rate is now just 3.1 percent, the lowest since July 1995. But wages remain stagnant, undercutting one of the key goals of the government and the central bank: ending years of deflation. Other indicators point to a continuation of Japan's slow growth prospects ahead. According to recently released government data, average monthly income per worker's household in October was down 0.9 percent in real terms from the previous year, while spending fell 2.3 percent over the same period after adjusting for inflation.
source by foreignpolicy