Political Segmentation of the Labor Market: The Establishment and Expansion of New Employment Forms

The sudden collapse of the asset-inflated economy in 1991 (usually referred to as ‘the burst of the bubble economy’) was the start of the period of low growth, or sometimes even shrinking, economy in the 1990s and in the 2000s. The crash of stock and land markets caused a serious credit contraction, by which business investment was radically decreased. The following period is often described as the ‘lost decade’ mainly referring to the lack of economic growth. Figure 3.1. shows the postwar trend of the rate of economic growth in Japan. The first oil shock reveals the end of the period of rapid economic growth. The following period shows significantly lower economic growth, although it is still higher than most of other advanced industrial societies. This was achieved in the midst of crises such as the end of Bretton Woods Regime, by which the yen was allowed to float, and the second round of oil shock. On the one hand, the competitive strength that Japanese companies showed was praised as ‘Japan as No.1’ during this period, but on the other, Japan’s excessive trade surplus was starting to be criticized. The end of this period came with the burst of the bubble. It clearly marks the start of a period of economic stagnation, and Japan even experienced the shrinkage of her economy several times during this period.