It’s a pretty good time to be looking for work in Japan right now.
Just look at the chart below as evidence.
It’s the nation’s jobs-to-applicants ratio, measuring the number of jobs currently available to those looking for work.
At 1.49, it currently stands at the highest level since February 1974.
No, before you ask, that’s not a typo. 1974.
It indicates that for every 100 people looking for work in May, there were 149 jobs available.
Pretty good odds, right?
According to economists at Nomura, the rapid increase in the ratio has been driven by two factors: a stronger Japanese economy and ageing demographics.
“We attribute this to an increasing corporate labor shortage as the economic expansion creates increasing demand for labor while societal aging reduces its supply,” the bank wrote in a note earlier this week.
However, while it’s pretty easy to find a job right now, that, as yet, has not translated to higher wage pressures.
“Economic textbooks tell us that we should expect wage growth to increase when labor supply-demand tightens,” says Nomura. “Thus far, however, we have not seen a marked rise in wages despite all the talk about labor shortages.”
It’s a conundrum for policymakers, and one that has no definitive explanation.
Factors such as increased female workplace participation, an increase in part-time workers, weak productivity growth and still-high job security fears, among others, have all been cited as explanations as to why there’s been little wage pressures despite tight labour market conditions.