Friday, August 7, 1998
Within 24 hours of each other, the Wall Street Journal and Nihon Keizai Shimbun, the leading economic dailies in the United States and Japan put articles on their front page concerning the employment status of recent college graduates, but their tone could not have been more different.
The Journal's tongue-in-cheek article described the situation for young people in parts of Seattle, which it described as the last redoubt of the "slackers," young people who would rather complain than get a job. According to the Journal,. their plight is becoming serious as the surging job market steadily depletes their ranks.
The article in Nikkei was somber. It noted that only 65.6 percent of spring college graduates have gotten employment this year, the lowest number on record with the exception of 1950, when the chaos of the immediate postwar period disrupted labor markets. Although part of the decrease was a consequence of more students going on to graduate school, most of those not getting jobs became unemployed. By contrast, at the peak of the previous robust recovery in 1991, 81.3 percent of new college graduates found employment.
A contrarian might say that articles of this sort suggest that the situation in both countries is likely to turn around soon. When everyone, even slackers, become optimistic, then pessimism is right around the corner. Indeed, the U.S.economy shows signs of weakening. No one is saying the opposite regarding Japan, but the job market for new college grads is likely to improve in coming years for quite another reason. Demand for grads may not pick up, but supply will decline. The number of those in their teens in Japan are declining, implying fewer college graduates within a few years. Just as the slacker phenomenon emerges in Japan, the baby bust of recent years is likely to nip it in the bud.
"JEI's Spin on the News" are the opinions of one of more members of JEI's staff and do not necessarily represent the views of the organization.