TOKYO -- Japan's jobless rate remained ultralow at 2.5% in April, which suggests full employment but obscures the growing number of people who want to work more but can't.
In an effort to bring Japanese labor market statistics closer to international standards, the ministry of internal affairs this year began tracking those who work less than 35 hours a week yet want to log more hours. That group came to 1.77 million during the January-March quarter -- close to the 1.84 million unemployed.
Examples of underemployed workers are part-time workers seeking full-time positions.
Japan's two-tier labor market is undergoing wrenching changes as its postwar demographic dividend turns rapidly into a burden.
According to Tuesday's latest jobs report, the country had 21.04 million "nonregular" workers in April -- a category that includes contract workers -- up 5% from a year earlier. Driving this growth was a 5.7% increase in part-time workers to 14.75 million.
Companies are scrambling to secure scarce labor, particularly in industries like construction and trucking. The ratio of job openings to candidates for "regular" work is at an all-time high. However, 14% of nonregular workers say they cannot find such positions, which provide job security and benefits, according to a 2017 survey by the internal affairs ministry.
This disconnect owes in large part to corporate hiring practices. Businesses often want the flexibility to shrink or expand the workforce according to the ebb and flow of earnings. A large pool of nonregular workers provides such freedom.
Japan had 65.66 million people employed in fiscal 2017, an increase of 870,000 from a year earlier. The number of underemployed workers roughly equals twice that gain. Giving the underemployed more hours may not decrease the jobless rate, but could help fill in the gaps in a tight labor market, not to mention contribute more to overburdened social welfare programs.
Japan's LU4 rate, a measure of underemployment, came to 5.9% in the January-March quarter, the ministry reported on May 11. This gauge includes the unemployed, underemployed and potential workers.
By comparison, the rate in the U.K. was 11% in the October-December quarter of 2017, with Germany at 8.5% and France at 17.2%. South Korea had a 12.2% rate in the January-March quarter.
In the U.S., the more narrowly defined U6 unemployment rate came to 8.5% in the January-March quarter.