From the uptick in homes sales and construction here on the coast to the rising stock market, there are reasons to feel better about the U.S. economy. However, there also are reasons to consider some troubling parallels between our jobs situation and what has happened in Japan in the past 20 years.
Writing in the May issue of The Atlantic magazine, Ethan Devine isnt the first to raise a warning flag about young Americans whose working lives have been severely damaged by the economic crisis of 2008 and anemic job creation in the years since. But Devine makes a particularly strong case for the necessity for all of us take concrete steps to help young people in our communities launch their careers.
In very real ways, our nations future depends on mitigating the damage that has been done.
The Japanese problems are an inexact match with ours. Their real-estate crash in 1990 was much worse than ours in 2008, believe it or not. There are political and social reasons why failed jobseekers during Japans long quasi-depression an economic permafunk have been especially marginalized and stigmatized by their inability to gain a foothold on the ladder to success. The U.S. remains a much younger and more vibrant nation than modern Japan.
No one knows why Japans economy never fully recovered, but some economists are starting to trace the problem to young people who cannot find good jobs, dont learn new skills, and neither earn nor spend enough to help get the economy moving. That generational problem, while far more advanced in Japan, is not unlike our own, Devine observes.
In the analysis of Devine and others, this failure to thrive due to lack of opportunity turns into an indigestible lump in an economy.
Today, more than 20 years after Japans bubble burst, youth unemployment is higher than ever. Only half of working 15-to-24-year-olds have regular jobs, and another 10 percent are unemployed. The rest are nonregulars. Somewhat akin to temp positions in the U.S., Japans nonregular jobs pay half as much as regular jobs, offer few benefits, and can be eliminated on a whim which they often are.
This concept of being nonregular will ring a bell with many high school and college graduates in our local communities. Young men and women those who havent long since relocated to look for better options frequently have to juggle several jobs during the course of the year, none of which provide career advancement or health benefits.
This chronic job instability makes it hard to buy a house or even fully contribute to the economy by making the ordinary consumer purchases that a steady paycheck affords. People stuck in this hamster wheel dont gain more valuable job skills or experience, and this in turn further hobbles their future prospects. This negative feedback loop may be a significant reason why Japans economy is now smaller than it was in 1992.
Devine closes his commentary with several crucial points:
Companies must have the confidence to hire. This confidence grows out of a genuine belief that tomorrow will be better, and while stimulus can help, the smooth performance of basic government functions, such as the passing of budgets, is prerequisite.
Parents must stress the importance of getting on the skill escalator early, and may have to subsidize continuing education or facilitate other job training for their children. And, in the absence of all else, government-run training programs are better than nothing.
Modern economies rest upon the skills of their workforces, and so, although it is expensive and time-consuming to train young workers, wasting their potential will prove more expensive.
Young workers themselves must be tenacious and adaptable, figuring out what skills are in demand and how to get them.