In regards to changes in employment statuses, of those who went from a “Freeter” job to a permanent/regular position, 70% of men and 60% of women were able to switch to a permanent employee job if the duration of the Freeter job was less than six months. However, if the duration of working a Freeter job was over three years, only 60% of men and 40% of women were then able to find a position as a permanent employee. It seems that the longer a person works a Freeter job, the more difficult it becomes to find a job as a permanent employee (Graphic 49).

## (Decline in Income Levels)

As Japan’s economic climate and the employment environment of young people change, there have been changes to the income levels of young people as well. This shift in income level affects the consumer behavior of young people, and can be said to be at the root of the changes in the day-to-day life of young people.

## ① Changes in Annual Income

Looking at the annual income levels by age groups, the annual income levels of people in their 20's and 30's are consistently lower than the other age groups. Since the latter half of the 1990's up to the present, there has been a decline in the annual income levels among all age groups, but the decline in the income levels of the 30-34 years old and 35-39 years old age groups is especially noticeable (Graphic 50).

## ② Changes in Wage Growth Rate

When comparing wage growth rates by generation, the real wage growth of the older generations rises as they get older, with a

Graphic 49 Job Changing from Freeter to Permanent Employee

(Note) Based on a survey done in 2011 among men and women in their 20's.

Source) Developed by MLIT from: The Japan Institute for Labour Policy and Training (JILPT) "Development in Employment Activities and Awareness of Young People in Japan's Major Cities" (3rd Survey of Young People's Work Style)

Graphic 50 Trend in Annual Income Levels of General Workers by Age Group (Real)

(Note) 1 Calculation: [Annual Income=regular monthly cash earning x 12 + special cash earnings]. Regular monthly cash earnings refer to cash earnings (Scheduled cash earnings and overtime payments. Does not include special earnings) predetermined by employment contract's payment terms and/or calculation method. Special cash earnings refer to previous year's amount.

2 Survey results from companies with over 10 employees.

3 Real annual income calculated using consumer price index (2010 Standard; All items, less imputed rent).

Source) Developed by the MLIT from: MHLW "Basic Survey on Wage Structure"; MIC "Consumer Price Index"

relatively significant increase, showing a steep upward rise on the graph. On the other hand, for the younger generations the wage growth as they get older is comparatively lower, showing a low rise on the graph (Graphic 51).

This shrinkage in the wage growth rate that should correspond to the younger people getting older may be explained by the rise in the percentage of people with non-regular employment positions among the younger generation. When the wage growth of regular and non-regular employees are compared, it is evident that for non-regular employees, along with overall lower wage levels, there is no set wage growth corresponding to becoming older, as there would be for regular employees. This is can be attributed to the fact that without an organization such as a union, non-regular employees have very little wage bargaining power. The structure for developing advanced skills and abilities is also very poor for non-regular workers. These reasons make it difficult for non-regular employees to get a wage increase (Graphic 52).