Japan’s example raises the stakes for America as it struggles to contain the Great Recession’s damage. Even if it rains jobs tomorrow, America’s current bout of high unemployment is already the longest in its postwar history. And youth unemployment is twice the national average. Japan’s experience highlights the risk that this generation may end up so utterly lost, it will set off a cycle of economic decline—one that quashes the chances of generations to come.
America is not destined to repeat Japan’s fate. For starters, Japan’s real-estate bubble was much larger than America’s. And its demographics are far worse; a shrinking population has undermined economic growth both arithmetically and psychologically. Making matters worse, Japan’s conformist culture ostracizes displaced workers. Any gap on a candidate’s résumé is viewed with deep suspicion, so temporary job loss in many cases leads to chronic unemployment.
But unemployed workers in the United States are also stigmatized. And the U.S. workforce will grow more slowly over the next 20 years than it has at any time in the past century. American companies, meanwhile, have shifted toward more part-time work since the crash of 2008, just as Japanese firms did in the early 1990s; 30 percent of America’s workers ages 20 to 24 were part-time in 2012, up from 23 percent in early 2008.
Japan’s example is particularly instructive because it is so recent. Workers today face a unique set of challenges, mostly related to globalization and technology, and Japan shows what a bad combination it can be when these structural headwinds collide with a severe economic downturn. It is hard enough to stay relevant in today’s workplace even with the benefit of a regular job. Young workers who fail to secure steady work are left in a lurch.
To succeed against these odds, young workers must be tenacious and adaptable, figuring out what skills are in demand and how to get them. But companies must also 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.
When the private sector does not generate enough skilled jobs, family and government should step into the breach. 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. (That’s how Iwabuchi landed his current job; some seven years after he made his movie, he is now a full-time nursing-home orderly.)
The whole country should join in bolstering this generation—and the next. 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.
In this respect, Japan’s lesson is clear: We must prevent a lost generation by any means necessary. Because it’s hard to stop at just one.