|[an error occurred while processing this directive]||[an error occurred while processing this directive]|
JAPAN: INVISIBLE JOBLESS (int'l edition)With so many uncounted, the rate may be 10%
Masao Ohashi, 52, sleeps in a cardboard box under a Tokyo expressway. He survives on crackers and rice, which he eats twice a day. Back in March, 1997, Ohashi's construction company, like thousands of others, went bankrupt. Since then, he has been looking in vain for another job. Despite 34 years of work experience, he can't even get hired to deliver newspapers. So he lives outdoors, only a 30-minute walk from where his niece lives with her family in the house where Ohashi was born in the Asakusa section of Tokyo. After more than a year, he has not told anyone in his family that he has lost his job.
Yet as bizarre as it seems, the Japanese government considers Ohashi employed. It regards anyone who works more than one hour in the last week of a month as having a job. The last time Ohashi worked was June 28, when he earned $59 by spending several hours moving a company's desks and chairs from one office to another. But he didn't register for help at a government unemployment office. For that he would need a permanent address, and he is too ashamed to seek refuge at his niece's. Instead, every day, he folds up his cardboard home at 7 a.m. and tucks it under a bridge so the police won't find it. ''No one here is counted as unemployed,'' Ohashi says, gesturing toward hundreds of homeless workers living in tents along the Sumidagawa River. ''Some people here are not even considered human beings.''
That Japan's invisible unemployed don't count says a lot about why the country continues to muddle through its worst recession since World War II. It also points to one of the biggest challenges ahead for Japan's new Cabinet. On Prime Minister Keizo Obuchi's first day in office on July 31, the government announced that Japan's unemployment rate had hit a postwar high of 4.3%. Some economists and consultants estimate that in reality, Japan's unemployment rate could possibly be as high as 10%.
With economic anxiety venting in such places as recent elections, politicians such as Obuchi face a dilemma. They must bring about enough reform to reshape the economy. But in doing so, they cannot inflict so much pain on the population that it causes a social backlash that will drive them out of office. ''We have found that our system doesn't fit anymore,'' says Koichi Hori, head of Boston Consulting Group in Japan. ''But no one has the guts to take the pain to restructure it.''
The official unemployment statistics don't reflect the throngs of housewives too discouraged even to try to return to the workforce, college graduates waiting at home with their parents for the economy to improve, and middle-aged workers ''temporarily'' laid off until their companies recover.
Yet there are some economists, analysts, and consultants who argue that layoffs are good for Japan. They say companies need to scale down bloated payrolls and that the official unemployment rate needs to reach 10.5% in order for companies to regain the strength they had back in 1990.
Still, joblessness is taking a personal toll on millions of workers across all generations--both blue and white collar. More workers than ever are depending on handouts. Some weeks, 900 people line up for the free noodles served out of blue plastic garbage pails on Sundays by a church in Asakusa, up from 550 a few months ago. Of Japan's 1.2 million college graduates this year, 15% are still looking for jobs, a startlingly high figure for Japan. Middle-aged heads of households accounted for 190,000 of the 550,000 people who joined the legions of the officially unemployed over the past year.
Many workers, for an extra couple of thousand dollars in severance pay, agree to stay silent about their dismissals to protect the image of the employer that fired them. Then, demoralized, they stay home and try to survive on their savings to escape the stigma of being unemployed. Or worse, they take their own lives. Last year, the National Police Agency tallied 3,556 suicides because of economic problems--a 17% increase over the previous year.
NO-MAN'S-LAND. The hidden jobless are trapped in a no-man's-land between politicians' empty promises of recovery and companies denying that they are laying anyone off. ''About 1.5 million more, mostly midlevel managers, would find themselves unemployed if Japanese companies aggressively laid off workers like American companies,'' says Minoru Ito of the government's Japan Institute of Labor.
It's clear the numbers are only going to get worse. Big corporations--including Kokusai Denshin Denwa (KDD), Long-Term Credit Bank of Japan, and Hino Motors--plan to shed hundreds from their payrolls through ''voluntary'' retirement schemes over the next several years. Hino, Japan's largest truckmaker, has asked 200 white-collar workers, 2% of its workforce, to take yearlong paid leaves at 60% to 80% of their salaries, plus $347 monthly allowances if they enroll in job-training schools. In theory, these employees can return to work in a year. So technically, they still have jobs. Yet with Hino's July sales down 35% vs. a year ago, it would take a drastic improvement in sales for the company to afford them. ''If banks and places like KDD let lots of people go, then you know smaller and midsize companies are even worse off,'' says Hiroshi Okuda, president of Toyota Motor Corp., which owns 18.2% of Hino.
Some companies go to extremes to avoid firing workers. Raita Taguchi, 35, worked for six years, mostly as a software programmer for Japan's largest industrial pumpmaker, Ebara Corp. When Ebara asked him to quit, he refused. Ebara still did not fire him. Instead, it assigned him to collect garbage. Taguchi did so for three months before the company finally laid him off, saying he was ''not the right person for a big organization,'' according to the company's personnel manager. He put up with collecting garbage because he was afraid a quitter would receive 20% to 40% less in severance pay than someone who gets fired. He also feared not finding another job. ''It's hard to find a job midcareer at a Japanese company,'' he says. All told, his severance pay amounted to $6,945.
Mass unemployment is a harsh blow for a society that made a pact with employers decades ago: loyalty in exchange for lifetime job security. Now, it feels as if that deal has been broken. ''Japanese companies are asking for our loyalty, but there are no guarantees,'' says Kiyotsugu Shitara, general secretary of the Tokyo Managers' Union, which for five years has been fighting for the rights of managers who feel they have been unfairly dismissed.
Many of Japan's jobless have little chance of working again soon. The despair is evident on the faces of the thousands of managers who line up every day at one of the government's largest ''Hello Work'' centers in Tokyo's Iidabashi district to seek employment. There's only a 5% chance that the center will be able to find any of them a job. Japan has a law against discrimination based on sex or race, but the center separates applicants by sex and by age to accommodate Japan's traditional seniority-based employment systems. And companies don't want expensive managers who have been groomed all their lives in another company's system. ''Younger people have a higher chance of finding a job,'' says Kazuaki Mishima, an official at the center.
For many, the center is their last hope. Tagashi Torami, 63, has gone there every week since he lost his job as a bus driver last December. But he hasn't found a position that pays more than half of his previous salary, despite his experience and licenses to do everything from driving buses to maintaining buildings. In fact, Torami used to run his own small auto-parts company until 15 years ago. Now, all he has is three more months' worth of unemployment insurance. ''After that, I'll accept anything,'' he says. Senior employees can expect unemployment insurance for 300 days at most. Most part-time workers, who account for 20% of Japan's workforce, aren't covered at all.
The government has started to wrestle with the reality of more jobless workers. In April, the Labor Ministry boosted its task force of employees who visit companies to ask about potential openings to 500 people, up from 300. And from Dec. 1, it plans to foot 80% of the bill for job-training schools. Government officials also want unemployed workers to start their own businesses. But with Japan's debt-ridden banks--the source of 45% of Japan's venture capital--incapable of lending to risky startups, that is not a viable option. ''The American government keeps demanding that we cut income taxes to boost consumption,'' says Keio University labor economics professor Atsushi Seike. ''Just cutting taxes will not solve this. We must create new jobs, as many as possible.''
FUTILE PROTESTS? In the meantime, some people are fighting to keep their jobs. Mineko Nakata, 57, refuses to resign as superintendent of a building run by a subsidiary of Itochu Corp., one of Japan's largest trading firms. She has worked for Itochu Housing Co. for six years but was told in May that her full-time position would be terminated in one month and that she would have to vacate her company-provided room. Itochu decided it wanted someone who could work three hours a day for $7 an hour. ''I cannot live on that,'' she said. So the company hired an older man to replace her who could get by on that salary on top of his pension. Nakata cannot collect on her pension for eight more years, so with the help of a dozen others from the Tokyo Managers' Union, she protests in front of Itochu. ''They cannot destroy her life,'' says fellow protester Terao Sonoumi, 36. Unfortunately, unless she can prove discrimination based on her sex, they can. Itochu Housing Director Yoichi Ogawa counters: ''We did not dismiss her. We canceled our contract.''
But one quiet, bespectacled, 43-year-old computer programmer probably represents the majority of white-collar workers. After working for two years with a 30% pay reduction--and then still being dismissed from the company where he worked for a decade--he feels so defeated that he would do just about anything to provide stability for his family. He won't risk his chances by giving his name, and he's tired of hearing about Japan's high-tech promised land--he needs to support his family today. ''I want a job that will continue to exist for the next 10 years,'' he says. ''So I'm considering learning how to make keys. At least people will always need that service.'' It may not be a brilliant career, but at least it's a paycheck.
To read a letter to the editor about this story, click here. By Emily Thornton in Tokyo
Updated Aug. 6, 1998 by bwwebmaster
Copyright 1998, Bloomberg L.P.