The Reality of the Labor Shortage in Japan Seen through a Statistical Examination of the Data

Abstract

As a result of the promotion of structural reforms, wages and prices continued to decline in a chain reaction from the late 1990s onwards. Under Abenomics, which was adopted at the end of 2012, the goal was to “escape from deflation,” and the Abe administration became directly involved in raising wages, leading to what was called “Government-led Shuntou.” In order to create social momentum for wage increases, it is necessary to emphasize the labor shortage, and the active job openings-to-applicants ratio has become a commonly used term when explaining the results of Abenomics. However, these efforts encouraged the government to provide economic explanations that were detached from the economic reality, and also contributed to the apparent increase in the active job openings-to-applicants ratio. A comprehensive analysis of the economic indicators makes it difficult to believe that the current labor shortage is an absolute shortage caused by constraints on the labor supply, and there is a need for policy consideration regarding the allocation of labor between industries.