Young Japanese face uncertain job market

Tue, Apr 02, 2002 page19

Young Japanese face uncertain job market

There's not much of a future for graduates today in Japan. With the economy going nowhere, many are lucky to even find part-time, temporary jobs with no benefits
- NY TIMES NEWS SERVICE
With Japan's economic engine stuck in neutral for over a decade, the recession's invisible victims are young people starting out in a radically changed job market.
Newspaper headlines lament downsizings when world famous companies gingerly lay off 50-year-old workers with generous severance packages. But the news media pay little attention to the reduced trickle of young workers going in the front door. Hiring freezes are freezing out a generation.

Masakatsu Kohama, 32, is pictured at an intersection in Tokyo's busy Ginza shopping district. Kohama has resigned from his job at Oki Engineering Co, joining an exodus of young workers disgruntled by a flood of long-serving managers sent from parent Oki Electric Industry Co to bide time until they retire.

PHOTO: BLOOMBERG

"Young people are paying the price for the recession," said Haruo Shimada, an economics professor who is also a social policy adviser to the government.

At Akirudai High School, a school for children of blue-collar families, 25 miles and a world away from the elegant boutiques of the Ginza, parents of students had barely taken down the hopeful red-and-white graduation banners the other day when their children sounded notes of pessimism.
"I looked for jobs, but I stopped after a month because I could not find the job that I wanted," Tomoaki Isogai said, pausing from signing the yearbooks of other young men who said they had no steady jobs in sight.
Blue-chip companies like Nissan Motor are closing factories in this suburb, where other workers commute into the city by train. Isogai's pessimism was echoed by veteran officials at his high school, a beige brick and concrete structure built a quarter century ago to handle a tide of Japanese baby boomers.
Two decades ago, about 90 percent of Akirudai graduates who wanted to work went straight into good-paying, stable, full-time jobs. This month, about half of the work-bound graduates drifted into part-time, temporary jobs with no benefits. Starting monthly salaries have fallen to US$1,000 today, from US$1,200 six years ago, said Tamiichi Okuyama, the school's guidance counselor.
"I think, How can they make a living with this kind of salary? and I feel sorry for them," said Okuyama, in a teacher's meeting room decorated with trophies from past sports triumphs. "Compared with their parents, I cannot say that this generation's future is brighter. First of all, their incomes will not reach the level of their parents."
Japan's wage contraction is felt by Hiromi Ishikawa, whose parents work as janitors.
"My generation's living standard will be lower than our parents," Ishikawa, 18, predicted less than an hour after getting her diploma. Feeling lucky to have landed a job in an industrial bakery, she said: "If we show even the slightest bad attitude, employers will say, `We don't need you.' They will shut you out."
The young people's collision here with the new Japan of hiring freezes is being repeated across the nation this spring, the traditional season for hiring.
A decade ago, four job openings awaited each Japanese high school graduate looking for work. Since then, the number of high school graduates seeking work has plummeted by two-thirds, or 400,000 people, because of dropping birth rates. But, despite this plunge, there is now barely one opening for each graduate who wants a job. In the late 1990s, 90 percent of Japanese high school graduates who wanted a job had lined one up by late January. This year, the job placement rate fell to 75 percent, the lowest on record.
Nissan, which a decade ago hired 2,500 high school graduates every spring, has not hired any in five years. Last year, a major association of employers polled its 550 member companies in Tokyo and learned that half had stopped hiring high school graduates. Frequently, college graduates are taking jobs that once went to high school graduates.
In Tottori, a rural prefecture west of Tokyo, electric machinery makers have hired 87 high school graduates this year, down from 518 last year.
Officially, Japan's unemployment rate is 5.3 percent. But Richard Katz, an American economist, argues that the real rate would be 8.5 percent if government statisticians counted discouraged workers, who are not currently looking for work, and part-time workers who lose their jobs. Official statistics show that young men have the nation's highest unemployment rate, 10.7 percent.
"Unemployment is at least double the official figures," said Kiyoshi Sasamori, president of the Japanese Trade Union Confederation, known as Rengo.
With Chinese workers performing the same work as Japanese workers for 5 percent of the pay, Japanese companies are shipping manufacturing plants overseas and cutting wages at home. This month, Hitachi asked workers to accept a 5 percent pay cut for this year. Mitsubishi Electric has asked workers to accept cuts of 2.9 percent.
This year, for the first time since organized labor in Japan started a traditional "spring offensive" for wage increases, Rengo, the main labor union federation, is not asking for raises. Instead, in an effort to preserve jobs, it is asking companies to adopt European-style work-sharing programs.
Some jobs in Japan have gone to foreign workers. From 1993, when the unskilled labor market was extremely tight here, the number of foreigners holding jobs here -- largely Brazilian and Southeast Asians -- has doubled.
"When the Japanese economy was booming, 10 years ago, the Japanese industry found it very difficult to hire young people, so they went after foreign workers," said Shimada, the economist. "Now Japanese society is paying the price of not paying attention to training its young people."
At Akirudai, Nanai Hosoya, the principal, said: "The factory jobs that could be filled by unskilled labor have been moved overseas. As a result, our students are in trouble."
Some Japanese youth, rebelling against the straitjacket conformism of their parents, have come to like the idea of temporary or part-time jobs. They enjoy the lifestyle of a freeter a Japanese word invented from the English free and the German arbeiter, or worker. But increasingly, the members of this swelling army of temporary workers, is realizing that "freeterism" is a sugarcoated way of cutting wages and benefits for Japan's new generation.
This wave of Japanese in their 20s stuck in dead-end jobs has become so great that one Tokyo area high school principal started an informal "movement to end freeterism."
Government officials are trying to react before generational resentments rise. In one hard-hit city, Akita, the city government has cut employee overtime to finance a $500,000 job program for high school graduates. Addressing Japan's cell phone-savvy unemployed youth, the national government started a service in early March to list more than 400,000 jobs on a Web site compatible with mobile phones.
Despite such efforts, the generational wealth chasm seems fated to grow. Two-thirds of the nation's savings are in the hands of people over age 60.
Within 20 years, today's diminished band of high school graduates will shoulder an increasingly heavy demographic load. By 2025, the ratio of workers to retirees is expected to be about two to one. If Japanese politicians live up to the nation's pension promises to the elderly, a group of faithful voters, social security deductions will almost have to double, to the 30 percent range, by 2020.
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