Japan's fall from grace and a sign of its disturbing future. This is the dark side of Japan, the lost generation. While this is now mostly forgotten, in the 1980s, Japan was seen as the next economic superpower that was going to replace the United States and completely take over the global economy. In a similar way, we might see China today. It seems so certain that there was a serious anxiety about Japan in the US, with articles like this one, talking about an economic harbor and how Japan is going to buy the entire United States, and with movies like Die Hard,

Rising Sun and Blade Runner all featuring the trope of Japanese corporations taking over America and the world. This anxiety was the result of the Japanese miracle, three decades of enormous consecutive economic growth, made possible by the unique Japanese economic system that was, at the time, seen as superior to the western model. Basically, it was based on cooperation between gigantic corporate cartels and the Japanese government. These cartels, called Keiretsu, were basically alliances of the biggest Japanese corporations, owning shares in each other and, while formally independent, working together to back each other up. And the biggest Keiretsu were given unfair support from the government in the form of enormous loans distributed by the state-owned National Bank of Japan. This basically meant that these alliances had access to an infinite stream of cash to finance their aggressive expansion abroad, while at the same time, the government would block foreign companies from expanding into the Japanese market. It wasn't a healthy system or a fair one, but it was working.

The Japanese stock market was booming, Japanese products were conquering one market after another, and regular people knew that if they worked hard and got a university degree, they would get a solid job at a large corporation. That would mean the guarantee of a lifetime employment.

Japan was unstoppable and everything was going great, until it wasn't.

By 1991, Japan had been growing extremely fast for three consecutive decades, and it became the second biggest economy after the United States. As the economy was growing, prices of real estate and values of companies listed on the stock market were growing as well. But by the end of the 1980s, this growth went into an overdrive and turned into a speculative mania. Basically, everyone thought that the economic boom and the growth of assets will continue forever, and the more you invest, the more money you will make. And meanwhile, the National Bank of Japan continued to print out and lend money to basically anyone who asked, regardless of what the money was or how trustworthy the creditors were. And then one day, the bubble popped.

Throughout the year 1990, the stock market fell by 43%, and real estate prices followed. The bursting of the bubble meant that regular people had much less money to spend, and that no one was willing to invest in Japanese companies anymore, leading to an end of the economic boom. On top of that, in the years after the burst of bubble, cracks in the Japanese system quickly began to show.

It was revealed that corruption was widespread and common in Japanese business and government, from insider trading to stock manipulation and fraud and bribery, and that the practically unlimited supply of loans created hundreds of zombie companies, businesses that would have gone bankrupt years ago, but that kept surviving on never-ending supply of cheap money borrowed from the state. In one decade, Japan went from being called an economic tiger riding the Japanese miracle to being called the sick man of Asia. But while this was a drastic downfall, it wasn't that unique. Economies of different countries go up and down, and that's part of life. But in Japan, it was different. Unlike in other countries, the economic downturn in Japan had devastating effects for a whole generation, effects that millions of people have never recovered from.

So why was that? Well, in order to answer that, we need to understand the Japanese work and hiring culture, which is, to put it mildly, very intense. And it has several unique aspects that make it quite different from any other job market in the world. A corporate career in Japan starts with shushoku katsudo, a unique Japanese job-hunting ritual that university graduates go through at the end of their studies. Many companies, including the biggest Keiretsu, hire only fresh graduates, and only once a year, but in mass, loads of people at once.

The fresh graduates pass the job-hunting ritual, filled with group interviews and seminars that thousands of people dressed in identical black and white suits have to go through, and at the end of it, they get a job. And they keep that job for decades until retirement, in line with another common policy known as shushinkoyo, or lifetime employment. And their company will then only promote from within, a policy known as shaneshoshin, grooming and cultivating their employees throughout their career to become future executives one day.

These practices, which were basically the universal standard in the 1990s, and are still very common in Japan to this day, bring stability, but they also create an incredibly rigid job market.

If you want to get a good job, you have one shot after university, and once you are hired, you stick with a company for the rest of your career. But if you fail to do that, you are left out in the cold, and the doors of most companies will remain closed to you forever.

But the point is that when the economic bubble burst, and the economic boom ended, this ritual was broken. While during the boom, it was not that hard to get at least some corporate job, after 1990, most companies froze their hiring entirely, for almost the entire decade, and they were not hiring any graduates at all. In order to keep all of their lifelong employees during the economic crisis, they eventually resumed their hiring in the new century, although finding a job became much harder ever since. But for a whole generation of people who graduated in the 1990s, it was too late. They were not graduates anymore by then, and so the companies would not hire them, as they were hiring fresh graduates instead.

Those people, whose only fault was being born at the wrong time, missed their shot, and fell through the cracks of the system. And a whole generation, millions of people, were left behind, destined to spend the rest of their lives on temporary, part-time, low-paid jobs. This period became known as the Employment Ice Age, and people who graduated during that time as the lost generation. And since the Japanese economy never fully recovered, more young people, graduating in the 2000s and then 2010s, joined their ranks. And the period of the last 30 years, became collectively known as the Lost Decades. This is obviously tragic for those who are part of the lost generation, but it doesn't affect just them. Instead, their sad fate negatively affects the entire Japanese society, and it casts a dark shadow over Japan's future.

There is an entire generation of people, now in their 30s and 40s, who are missing from the job market entirely. They usually live with, and often off, their parents. They were never economically secure enough to start families of their own, and they never had proper jobs and careers.

Around 15% of the population, almost 17 million people, are considered part of the lost generation, and they make up the age group that's the most important for an economy of any country.

It's the people in their 30s and 40s who usually spend the most, on their families, housing, taking mortgages, buying cars, they are those who keep the economic engine going.

But in Japan, there's no one to do that now. And economy is not Japan's only problem that's getting worse because of the lost generation. Currently, the country is dealing with what's been called super aging. Japan has the highest percentage of elderly people, almost 30% of the population in the world, and it's aging more rapidly than any other country. And that is partly also because of the millions of children that the lost generation never had.

By 2050, the ratio between seniors and people in a working age will be 1 to 1.3, meaning that there will be almost as many people over 65 as people between 15 and 64. In any country in the world, the elderly are dependent on the taxes paid by people in what's called productive age. But in

Japan, this will be, at some point, simply no longer sustainable. And on top of that, the lost generation created another social issue that is becoming increasingly damaging to the survival of the Japanese society, the phenomenon of so-called hikikomori. These are Japanese men who have voluntarily decided to completely cut themselves off of society, and they're spending their lives in complete isolation, never leaving their house and not having any social contacts at all, usually being completely financially dependent on their parents. The first hikikomori were members of the original lost generation, men, today in their 30s and 40s, who could not fulfill the requirements expected from them by the Japanese society, get a job, climb the career ladder, start a family and provide for them, and decided to give up entirely instead. But eventually they were joined by others from the younger generations as well, who, although they did have a chance to join the job market, just found it too stressful and competitive. Today, there is almost 1 million of these men in the Japanese society, with many more on the verge of joining them. And the social phenomenon is quickly becoming a very real mainstream problem, affecting the entire society. The Japanese government is aware of the extremely negative impacts that the existence of the lost generation and the growing number of hikikomori are having on the Japanese society and economy, and it has announced that it will try to help the lost generation to get back up on its feet and reintegrate those who have secluded themselves from the society. But so far, it had very little success. The problem is that the Japanese economy is still not doing great, and at the same time, it still has extremely rigid work culture. Not only that people are expected to work extremely long hours and comply with strict hierarchy, but many companies still follow the same pattern of lifelong employment, hiring only once a year and promoting only from within the company, making it impossible for the employees to take breaks, or even to get a second chance if they fail to get their foot in the door. And so millions of people are stuck, and their numbers are constantly growing, as more young people fail to succeed in the ruthless system, and eventually, they just give up.