One fear in the current recession is that the unemployment and slowdown may cause a generation of Americans to be like the Japanese “lost generation”.

There’s an entire generation of people in their late 20s and early 30s who came of age during Japan’s so-called lost decade, a stretch of economic stagnation that started to ease in 2003. Through that period, with Japanese companies in retrenchment mode, young people faced what came to be known as a “hiring ice age.” Many settled for odd jobs or part-time work to make ends meet but hoped eventually to find their way into regular employment with the stars of corporate Japan. Instead, they’re being passed over in favor of new graduates—a serious problem in a country that still values lifetime employment and frowns on midcareer job-hopping.

It’s easy to think of the short term impact, but a lost generation also means fewer marriages, fewer children, and fewer spenders in coming generations.

These millions of young people face a life that’s vastly different from that of their parents. For Japan’s postwar baby boomers, jobs provided certainty, spurring them to partner and procreate. Faced with insecurity, many of Japan’s twenty- and thirtysomethings are doing neither. The number of marriages fell to 714,000 in 2005 from 1 million-plus in the 1970s. That could exacerbate a drop in Japan’s birthrate, already among the lowest in the developed world. “You don’t get maternity pay, and you have no job to return to—that makes it hard,” says Masako Ikeda, a 30-year-old who works at a video game company in Tokyo but is employed by a job agency.

You already see this problem in boom times if someone doesn’t get a job for a long time after graduating from University. I wouldn’t be surprised if it’s more pronounced.

Posted by Kevin in Blogs Tags: japan, recession