February 10, 2025

Japan's Workforce Reaches a Record High of 67.81 Million

The number of employed people is at an all-time high. The Ministry of Internal Affairs and Communications announced on January 31st that in 2024, the number of employed individuals reached 67.81 million, which is an increase of 340,000 from the previous year and the highest level since 1953, when comparable data became available. Employment among women and seniors has grown, and regular employment has risen. Surplus labor is limited. The Japanese economy faces the challenge of addressing labor shortages while boosting productivity.

Employed individuals are defined as those aged 15 and over who have a job or are temporarily on leave. The number of employed individuals has been rising since 2013, reflecting economic recovery, particularly among women and seniors. However, in 2020, it fell by 400,000 compared to the previous year due to the effects of the new coronavirus.

Since then, it has continued to recover gradually, and by 2024, it exceeded the 2019 level, which was the highest ever recorded. The employment rate, indicating the proportion of employed individuals aged 15 and older, reached 61.7% in 2024, an increase of 0.5 percentage points from the previous year.

The largest number of employed women was 30.82 million, 310,000 more than the previous year. The employment rate for men only increased by 1.9 percentage points over the past 10 years, but for women, it increased by 6.6 percentage points. The employment rate for the elderly is also on the rise, with those aged 65 and over at 25.7%, up 0.5 percentage points from the previous year.

Examining employment status, the number of regular employees rose significantly by 390,000, while the number of non-regular employees, including part-timers, casual workers, and contract employees, increased by 20,000. The trend of companies struggling to attract talent without offering better employment conditions may be becoming more prevalent.

An increase in the number of workers positively impacts economic growth. By boosting the supply of products and services from companies, higher income drives greater consumption and demand. Additionally, an increase in the number of individuals enrolled in social insurance enhances the financial stability of pensions and health insurance.

As birthrates continue to decline and the population ages, the number of individuals aged 15 and older has decreased since the 2010s. The potential for employment rate growth is limited due to the increasing number of female and elderly workers. Estimates from the Japan Institute for Labor Policy and Training suggest that by 2040, the number of employed individuals could drop to 57.68 million in a worst-case scenario. We should consider implementing artificial intelligence (AI) and other strategies to address the anticipated workforce decline and enhance productivity now.