Harnessing the Power of Japan’s Employment Ice Age Generation in an Aging Society
（１）The Current Status of the Employment Ice Age Generation in a Low Birthrate and Aging Society
In Japan, the declining birth rate has been a growing concern since the early 1970s. This issue gained significant attention as a societal problem around 1990, when the birth rate fell below the rate seen in 1966, the year of "Hinoe-Uma" (a year considered inauspicious for births). The main causes of the declining birth rate are attributed to changing values and social environments, which have led to lower marriage rates and delayed marriages. More recently, the increase in non-regular employment and the decline in income levels have exacerbated these trends, further reducing marriage rates and increasing the age at marriage.
The "employment ice age generation" refers to those born between the 1970s and 1980s who entered the job market in the mid-1990s or later.
When they first entered the workforce, the employment environment was deteriorating. Looking back from the present Reiwa era, this generation has spent their careers during what is now referred to as the "lost 30 years." In the mid-2000s, this period was known as the "lost decade," but due to the impact of the Lehman Shock, those who were entering their 30s at that time only saw improvements in the job market by the mid-2010s, by which time they were already in their late 30s to 40s.
In 2003, Youth Employment Support Centers (Job Cafes) were established in all prefectures across Japan. Various employment promotion measures, such as the job seeker support system and the employment adjustment subsidy system implemented in the late 2000s, have had some success in converting the "employment ice age generation" to regular employment. However, as of 2019, there were still hundreds of thousands of involuntary non-regular workers, and even those working as regular employees had lower income levels compared to other generations.
Many in this generation struggled to find stable employment from the beginning of their careers. Consequently, many ended up working in poor labor conditions and repeatedly changing jobs.
Despite these challenging circumstances, the importance of this generation in society is increasing. Firstly, their population size is significant. As seen in the population pyramid, they make up a large portion of the working-age population (ages 20-65). It is no exaggeration to say that society cannot function without utilizing this generation. Currently, those in this generation are mostly in their 40s, meaning they are now in middle management or senior roles within companies, expected to perform well and mentor the younger generation. Additionally, in their personal lives, they are often the main caregivers for their parents and key supporters of the pension system.
（２）For the Success of the Employment Ice Age Generation
In 2019, the Japanese government launched a support plan for the "employment ice age generation," initiating focused support for this group. As mentioned earlier, their active participation is essential for the stable maintenance of social security systems and overall social stability in the future. Efforts have been made to convert the estimated hundreds of thousands of involuntary non-regular workers to regular employment and to integrate welfare and employment support measures. However, the effectiveness of these measures has been limited, partly due to the unfortunate timing overlapping with the COVID-19 pandemic. Despite this, the "employment ice age generation" has continued to age and accumulate career experience, and now is seen as a new starting point.
The "Basic Policy on Economic and Fiscal Management" (commonly known as the "Big-Boned Policy") announced in the summer of 2023, also addresses support for the "employment ice age generation," emphasizing the need for labor mobility in line with industrial structural changes across society. This means promoting re-skilling so that workers can transition to growing industries such as Digital Transformation (DX) and Green Transformation (GX). While vocational training centers at the national and prefectural levels have developed the skills of the unemployed, and the "Job Seeker Support System" has supported skill enhancement for job seekers and non-regular workers, traditionally, much of the workforce training and development has relied heavily on in-company training (including on-the-job training).
To change this situation, the policy calls for better integration of in-company training with external vocational training to develop human resources aligned with industrial structural changes across society. The year 2023 is seen as a transitional year, with significant progress expected from 2024 onwards. The re-skilling initiatives also target the "employment ice age generation," who are now in their late 40s to early 50s. From my own re-skilling experience (studying in graduate school for two years starting at age 36, and now at 45, self-funding studies in systems thinking and language learning), I believe that it is still possible to level up as long as there is a willingness to learn. However, it is crucial to emphasize whether the individual has the "willingness to learn."
Last year, I visited Denmark and Sweden to observe their vocational training and labor policies. Denmark is well-known for its "flexicurity" employment system, and Sweden is the birthplace of the "recurrent" education system. Both countries heavily invest in vocational training. In Sweden, in response to the increase in immigrants, they have expanded vocational training and employment support measures to develop programs enabling immigrants to secure high-level jobs. Although they face significant challenges, I see similarities between immigrants in these countries and non-regular workers in Japan. Both groups often lack career advancement opportunities and have persistently low incomes.
In Sweden, significant efforts are made in re-skilling immigrants, and there are also systems for providing life counseling. The Nordic countries, even the most populous Sweden, have only about 10 million people. Therefore, they focus on developing industries that can compete in the global market, emphasizing skill enhancement across the population. This approach seems to contribute to the high sense of happiness among their citizens, as well as their high rankings in labor productivity and innovation on the global stage.
Returning to the topic, re-skilling has become a trend in Japan over the past year, with many companies and local governments initiating efforts. Re-skilling, as I understand it, is not just about skill enhancement but about developing skills with a focus on industrial structural transformation. This doesn't mean that old industries are bad; even traditional industries can achieve significant value creation by utilizing technologies like AI. It may not be necessary to change the industry but rather to transform its structure.
For the "employment ice age generation" to thrive, it is essential for individuals to actively engage in re-skilling and for companies to support these efforts. This is critical for the current central age group in Japan and a crucial initiative for maintaining social security in the long term.
（３）The Future of the Employment Ice Age Generation
I have heard that the focused support period for the "employment ice age generation" by the government will come to an end in fiscal year 2024 after one extension. However, the active participation of this generation is extremely important for both companies and society.
Over the past few years, I have been invited to various seminars to speak to corporate HR managers about hiring and utilizing the "employment ice age generation." I have also had the opportunity to contribute articles to the media and specialized journals. Among the feedback and criticism I have received, some have asked, "Why should we favor the employment ice age generation?" Statistically, the non-regular employment rate of this generation is now not significantly different from other generations, and certain successes in converting non-regular workers to regular employment can be seen as a result of policy efforts. However, I believe that being a "regular employee" is not the ultimate goal for workers. Rather, what is needed is a "stable income" that allows individuals to live happily in their daily lives.
The income levels of the "employment ice age generation" are lower compared to the previous generation. This is attributed to various factors, but primarily because many of them started their careers in small to medium-sized enterprises, in non-regular employment, or remained unemployed. This initial setback impacted their subsequent income levels, preventing them from effectively building their careers. Additionally, the diversification of employment types and the increase in non-regular employment at the start of their careers (with many taking non-regular jobs unwillingly) also contributed to this issue.
Is it too late to recover the "lost 30 years" for the employment ice age generation? I believe there is still time. Being right in the middle of this generation myself, I feel that the desire and ability to learn are still very much alive. This belief is reinforced by my interactions at job fairs and seminars for this generation, where I have witnessed their earnestness, sincerity, and high motivation. Their eyes still shine with determination. I can envision them finding new opportunities and thriving through job fairs and encounters at employment offices. Ultimately, income depends on individual performance and how it is evaluated by companies, but if the willingness to learn is there, I believe there is still room for improvement.
According to the "Career and Awareness of the Employment Ice Age Generation" report released by the Japan Institute for Labour Policy and Training in January 2024, this generation has experienced a "yo-yo career," alternating between regular employment, non-regular employment, and periods of unemployment. The report highlights the need for "places for exchange and information sharing" and "extension of vocational training periods" as policy issues, based on interviews with those affected. Additionally, it points out that with the aging of their parents and the generation itself nearing old age, the issues of "family and housing for the employment ice age generation" will become significant.
The savings rate for this generation is low, with one in four having no savings. What kind of society will we have 20 years from now as this generation ages? Some predict an increase in the rate of welfare dependency and the perpetuation of poverty affecting their children and grandchildren. However, these are possibilities, not certainties. We still have the opportunity to change this. The first step is for each individual in this generation to engage in re-skilling and other vocational development to become active members of society. This responsibility doesn't rest solely on the workers; companies also need to play their part.
Let's focus on the experiences of the employment ice age generation, who have lived through a yo-yo career. Let's uncover the valuable experiences they might not even realize they have and work with them to enhance their skills. This approach will not only contribute to the growth of companies but also to the future society and the next generation.
This article is a translation of a column originally provided in Japanese, as part of Kanagawa Prefecture's efforts to support the employment ice age generation. It is aimed at HR managers in companies.
The original text in Japanese can be found here
Tetsuya Fujii (藤井哲也)
CEO of Public X Inc. / Co-founder of SOCIALX.inc
Born in October 1978, 45 years old, from Shiga Prefecture. Founded a company in 2003 dedicated to supporting youth employment. Expanded activities into the political and administrative sectors in 2011, addressing regional and social issues as a local assembly member. Established Public X in Kyoto as a second venture in 2020. Co-founded SOCIALX in Tokyo in 2021.Graduated from Kyoto University Graduate School of Public Policy. Member of the Japan Society for Human Resource Management. Winner of the Grand Prize at the Manifesto Awards. Recipient of the Good Design Award. Author of several books.
Personal "X" account is [here].