October 24, 2005

Japan is Back, For Real This Time?

FEER puts out some interesting points...although I'm a bit worried about the debt.
A job-rich recovery. The most important new dynamic is a fundamental change in Japan’s human-capital investment. Where companies build new factories, new jobs will be created. Data on job offers confirms that today more companies are looking to hire more people than ever before. Almost 800,000 new job offers are put on the market every month. However, actual job creation runs at only about 40,000 jobs to 50,000 jobs. This points to a mismatch in the labor market where demand actually exceeds supply. To put it bluntly, companies want to hire engineers or qualified nurses, but can only find unemployed construction workers. However, the fact that demand does exceed supply bodes well for further falls in unemployment and further increases in wages.

Moreover, the quality of jobs is now improving. Over the past decade, most of the jobs created were on a part-time or contract basis only. Cost-conscious managers were afraid to lock in potentially high fixed costs and focused on employing cheap and easily fired part-time workers. By one estimate, almost 42% of employees at companies listed on the stock exchanges are now part-time or contract workers, up from 15% just 15 years ago. In contrast, since the start of this year, full-time job growth is outpacing part-time job creation for the first time in almost 10 years, and several multinational companies have announced that they will exclusively hire on a full-time basis in order to build a better human-capital base.


No comments: