This is attributable to the fact that wage levels were adjusted in a reasonably flexible manner, reflecting society’s preference to prioritize employment. That people’s jobs were preserved was a positive in terms of social stability. At the same time, it also had a negative consequence.
Wage levels were adjusted but not sufficiently for the magnitude of the shock to the economy, and a situation arose in which effectively unemployed people retained their jobs at companies. This delayed the necessary reallocation of resources to respond to demand and cost changes after the bubble burst.