What Japan’s Lost Decade Meant For Youth Employment – Business Insider
The reason for these results are somewhat unique to Japan: the country boasts the toughest separation laws among OECD nations; in most cases employers have a judiciary duty either to verify just cause for dismissals or to attempt alternative measures to avoid them.
This makes it harder to get rid of older employees and easier to not hire young people.
But it was mostly the effect of basic plunging labor demand caused by total GDP declining 25 percent.
Genda’s conclusion about what this would mean for Japan is pretty scary:
An increase in youth joblessness may cause social problems in Japan. The youth crime rate is closely linked to labor market conditions (Ohtake and Okamura 2000). The failure to transfer skills from older generations to younger generations might seriously aﬀect future productivity in the Japanese economy.
Youth unemployment has reached 16.8% in the US.
The Japan experience has an ominous lesson for the US. Politicians love to talk about ensuring the economy is strong for future generations, but when they do, they’re usually talking about the national debt, and how we need to lower it.
But the killer for youth is lack of growth. Slowing the economy through austerity is the exact opposite thing that should be done for future generations.