Current Labor Market Conditions in Japan: Challenges and Mitigation Efforts

Bandung – Japan is currently facing significant challenges in its labor market due to a declining working-age population and low birth rates. Recent data indicates that in September 2024, the unemployment rate fell to 2.4% from 2.5% in August. The job-to-applicant ratio also increased to 1.24 from 1.23, indicating improved job availability.

Despite the low unemployment rate, many Japanese companies are struggling to fill job vacancies. A Reuters survey in January 2025 revealed that two-thirds of Japanese companies are significantly affected by labor shortages, particularly in non-manufacturing sectors and small businesses. This issue raises concerns about potential economic stagnation.

To address this problem, the Japanese government plans to bring in 820,000 migrant workers over the next five years. However, challenges such as strict immigration policies and competition from other countries offering more attractive working conditions remain.

Japanese companies are also taking steps to mitigate labor shortages, including enhancing recruitment efforts, extending the retirement age, and rehiring retired employees. Additionally, many firms plan to increase wages and invest in human resources in 2025.

Overall, while Japan has managed to maintain a low unemployment rate, addressing labor shortages remains a critical issue requiring continued action from both the government and the private sector.

Sources: Various Sources