[E-Daily Bang Sung Hoon Reporter] Atsushi Torigoe (50), who has worked for nearly 20 years at a warehouse for a fashion company in Tokyo, Japan, currently earns an annual salary of about 3.6 million yen (approximately 31.9 million won). His income had been rising gradually, but it has actually decreased recently after the company cut bonuses and revised its pay structure. Amid this situation, the company posted a job listing offering higher wages to new hires. While acknowledging that “it’s good for young people to receive better pay,” Torigoe voiced his dissatisfaction, asking, “But why won’t they raise my salary?”

Although Japan has entered an era where prices and wages are rising simultaneously for the first time in decades, analysis suggests there is a generation that is not actually benefiting from this economic warmth. This refers to people in their 40s and 50s who entered the workforce after the bubble economy burst—the so-called “employment ice age generation.”

On the 18th (local time), *The Economist* assessed that those who entered the labor market between 1993 and 2004 are suffering losses again in middle age, just as they did in their youth. Among college graduates, this group includes those born in the 1970s and early 1980s.

Their situation stands in stark contrast to that of the generation immediately before them. During the bubble economy of the 1980s, Japanese companies hired on a massive scale. Stories abound of college students’ mailboxes overflowing with job offers and companies courting candidates with lavish dinners. However, when the bubble burst in the early 1990s, everything changed. Companies, unable to lay off existing employees due to rigid employment systems, cut back on new hires instead. The competition ratio for college graduates—which had approached as high as 3 to 1—fell below 1 in 2000.

Toshihisa Nagai, who graduated in 1999, gave up his dream of joining a securities firm. “It felt really foolish to even be job hunting,” he recalled. Many in his generation submitted applications to dozens or even hundreds of companies, but to no avail. The fact that they were the children of the baby boomers—and thus part of a large population—also worked against them.

Those who failed to secure regular employment were pushed into temporary or contract positions. The Japanese labor market draws a clear distinction between regular employees—who enjoy legal protections and seniority-based pay raises—and non-regular employees, who are paid significantly less for the same work and are the first to be laid off during an economic downturn. Ayako Kondo, a professor at the University of Tokyo, explained that young people, who now have to support themselves, have come to fill the roles once occupied by housewives who were supplementing their husbands’ salaries. Terms like “freeter,” “parasite single,” and “hikikomori” became widespread during this period.

As time passed and labor shortages intensified, some of the wounds began to heal. Yusuke Shimoda, a researcher at the Japan Research Institute, noted that the proportion of regular employees among the “Ice Age Generation” has nearly caught up with that of the older generation. However, wages have not followed suit. Those who worked as non-regular employees for a long time cannot fully bridge the wage gap even after transitioning to regular employment. Even for those who became regular employees, another barrier remained. Promotions were delayed because top positions in companies were occupied by those hired during the “bubble era.” In Japan, where changing jobs is rare, it was also difficult to find better pay elsewhere.

The current trend of wage increases is also largely benefiting the younger generation. This is because companies facing labor shortages are spending more to retain new hires, while there is little incentive to raise wages for middle-aged employees, who rarely change jobs. According to Hideo Kumano, an economist at the Dai-ichi Life Research Institute, the nominal wages of college graduates in their 20s and 30s rose by 10–16% last year compared to five years ago, but those in their early 50s actually fell by 1.3%.

The problem lies in retirement. Since Japanese pensions are linked to lifetime earnings, wages that have been suppressed for decades will directly result in lower pension benefits. Economist Kumano stated, “People who came of age during an economic downturn are highly likely to carry that disadvantage with them for the rest of their lives.” Professor Kondo warned that a significant number of them may eventually have to rely on public assistance. Public assistance is not a system designed to support the elderly over the long term, and the cost is high because the government covers 100% of recipients’ medical expenses. With the younger generation’s population shrinking, the burden of support is growing heavier.

Housing is also a problem. This generation has a lower homeownership rate than the previous one, and the Japanese rental market presents high barriers for older tenants. It was not until last April that the Japanese government unveiled a three-year plan covering both asset formation and housing.

The Economist criticized this as a belated response, noting, “The mere coincidence of entering society during a recession is dictating the course of an entire generation’s lives. (The Japanese government) needs to give this much deeper consideration.”