Ever since the collapse of the bubble economy, the unemployment rate in Japan has been rising. Japan has never known unemployment much higher than 2%, but since the mid 1990s, the unemployment rate keeps rising, above 3%, up to 5.3% in 2002 (figure 1-4-6). The Japanese industry came through a rapid change in the 1990s, when it first experienced a rapid growth with companies able to hire new employees by the bulk, offering them life-time employment, creating new positions and increasing production. At the collapse, many companies were forced to diminish their workforce, if they didn’t go bankrupt. Those who survived aspired to reduce the workforce to a sustainable minimum, replacing unnecessary positions and implementing new technologies.
The Japanese had a rigid system of employment, based on seniority, which wasn’t able to provide fast and accurate reaction to the changes in the economic situation. The decision making system failed to save the companies and their employees jobs. These abrupt changes reflected in the people as well. They became more concerned with the government, with its policies and action. Before, when the people were well off, they just went along with the group. With such sudden collapse, they became concerned about their quality of life being in danger. More people became involved in politics, started focusing on themselves instead of on the group.
Figure 1-4-6 |
This high unemployment is partially a result of the bubble economy run in the late 1980s and early 1990s; but is also influenced by lowering export into the US, who are loosing their buying power with the falling dollar. The American falling economy has been dragging down the Japanese, which is closely connected to it by means of export-import relations and investment.
