There is no such thing as a "neutral" unemployment rate. This is because the definitions of "workforce," "employed," and "unemployed" may vary. According to what do they vary? Here, political and economic considerations quickly enter into the picture. But before getting ahead of ourselves, first we should look at how the Japanese government defines these categories.
The Japanese government's website divides the entire population into the following categories:
0. Those younger than 15 are automatically excluded from consideration.1. Those older than 15 are divided into:1.1.Non-workforce (i.e. people who are not considered to be part of the labor market)1.2. The workforce (i.e. the labor market)Of the latter,1.2.1. The employed
1.2.2. The unemployed
Here comes the problematic part. According to the website, if you worked for one hour or longer during the final week of a given month, you are considered employed. (For those who can read Japanese, see Question F-5, "If you only worked for one hour per month, are you still considered employed?") That means that, working for one hour at, say, a local daycare centre, and earning something like $10, already makes you employed. You are then put into the same category as those who earn $3,000 per month working in an office.
As if this were not enough, the government also states that if you are staying at your relative's house and helping out with housework, then you are employed. (Again, see Question F-4, "Are people who help out with housework considered employed even if they do not earn anything?")
As a side-note, the government claims that these definitions are in accordance with ILO standards. However, the ILO criteria explicitly states that housework without pay should not count as labor. Here's the evidence:
Students, homemakers and others mainly engaged in non-economic activities during the reference period (...) should be regarded as unemployed (Paragraph 1, (6))
How is the Japanese government's definition of the "unemployed" consistent with this?
To top it all off, the definition of "workforce" on the Japanese government's website states that if you are not registered at the unemployment office, and if you have not been submitting resumes or going to interviews during the reference period, then you are not part of the workforce. This means that the so-called "NEET" people are mostly excluded from the survey altogether and so are not counted as unemployed.
In sum: the Japanese government considers people helping out with housework and people who take up highly precarious work as employed, while they do not count the NEET and other such "inactive" people as part of the unemployed.
Taking all this into account, the official unemployment rate, which is 5% for age 15-24 and 4.5% for age 25-34, begins to appear suspect of misrepresentation. In fact, the Japanese government website officially admits that the real unemployment rate may be over 10% (overall; hence, obviously higher for ages 15-34) due to biases in the way the official rate is calculated. Despite this apologetic note, however, the government still boasts that unemployment rates have been diminishing for "59 consecutive months up to now."
Why does the Japanese government work with such obviously problematic definitions? The answer is that it wants to justify its cut on public spending. At the national level, it is convenient for the Japanese government to present Japan as a country with a healthy and sustainable economy, so that it can maintain the confidence of those who invest in Japan-based corporations. It also helps to have a good image when trying to host the Olympics in 2020. At the individual level, it allows government bureaucrats to reject more applications for social security and thus cut expenses. If you live with your relatives and help out with housework, and if you apply for social security, you will not get it because you are technically speaking "employed."
Corporate executives, or financial capitalists, also have an incentive to keep this kind of definition in tact. In this way, they can encourage workers to actively market their own labor power on the labor market and generate competition. This then discourages those who made it into the white collar work environments from negotiating with their bosses or employers -- the employers will simply fire such "rebels," or might put pressure by pointing out that there is a huge reserve army waiting to take his or her position. This is how not only "unskilled" (a dubious category in its own right) but also "skilled" labor is made cheaper -- lawyers, doctors, professors, and state officials are made to work at wages and salaries which are no better than the part-time worker struggling at a convenience store or a hamburger shop.
So, what is the take-home message for the unemployed youth?
First, on a psychological level: Do not feel as if you are part of the 4.5-5% "lazy" people. There are so many more people like you who are not counted in simply because of the way the definitions are set up.
Second, on a political level: The government has an interest in making unemployed young people invisible. Therefore, actively promote visibility. Make it an issue which the government cannot ignore. Let those who work for social security offices know that there is a bias in the way the government defines "workforce" and "employed."
Finally, it is also important to remember that being employed does not necessarily make one any stabler. Currently, 40% of all Japanese workers are part-time, or, more accurately, precarious. Of the remaining 60%, an indefinite part are under pressure to work well beyond the norm to avoid getting fired. There are physical and psychological health risks associated with working under such conditions. It is very important for unemployed people to be selective with what kinds of jobs they are willing to take. Do not let unemployment statistics and the rhetoric surrounding it prevent you from being selective with the kind of job you would like to take.
Meanwhile, there is much that the Japanese government can do to improve their method and produce a more accurate unemployment rate which better reflects reality.
Here are the suggestions:
(1) Revise the definitions. Basically, if a person cannot earn enough income to sustain him or her self, then even if that person is working, that person ought to be considered unemployed. In other words, do not count the working poor as employed.
(2) Use different data. Presently, the government surveys 100,000 citizens from 40,000 randomly chosen households. This is a very, very small sample - only 0.077% of the total population. Rather than relying on such a limited survey, the government should make corporations and companies produce employment reports and compare these reports with census data to calculate the unemployment rate.
Obviously these are very rough formulations and require much improvement, but the main idea should be clear. Working along those lines, the Japanese government, working with the ILO, can draft an alternative set of criteria in order to increase the accuracy of unemployment rates.
Meanwhile, there is much that the Japanese government can do to improve their method and produce a more accurate unemployment rate which better reflects reality.
Here are the suggestions:
(1) Revise the definitions. Basically, if a person cannot earn enough income to sustain him or her self, then even if that person is working, that person ought to be considered unemployed. In other words, do not count the working poor as employed.
(2) Use different data. Presently, the government surveys 100,000 citizens from 40,000 randomly chosen households. This is a very, very small sample - only 0.077% of the total population. Rather than relying on such a limited survey, the government should make corporations and companies produce employment reports and compare these reports with census data to calculate the unemployment rate.
Obviously these are very rough formulations and require much improvement, but the main idea should be clear. Working along those lines, the Japanese government, working with the ILO, can draft an alternative set of criteria in order to increase the accuracy of unemployment rates.
