From Overseas Press

Japan may suffer second "Lost Generation" of youth

(Agencies)
Updated: 2010-04-23 10:09

While life-time employment has unraveled during decades of economic stagnation, the recruitment system remains much the same. That means the burden falls mainly on new graduates and non-regular workers, now about one-third of Japan's labor force, when companies cut back on hiring to save costs.

"To protect the high wages of senior workers, they are sacrificing opportunities for youth," said Naohiro Yashiro, an economics professor at the International Christian University (ICU) in Tokyo. "Companies put all the adjustment onto non-regular workers and new graduates, who are the weakest."

Government efforts to address the problem are focusing on career counseling, job training and urging companies to hire more full-timers, on the one hand, while putting new limits on employing temps on the other.

"If students don't get job offers before they graduate, they often become 'freeters' or other non-regular workers with low salaries and no benefits, so we want to help them as much as possible to find stable employment before they graduate," said Masayo Murayama at the Tokyo Metropolitan Government, which has set up a special counseling service for unemployed new grads.

LABOR MARKET ADJUSTMENT

Hatoyama's cabinet last month approved a bill that would prohibit worker dispatch firms from sending short-term temps to manufacturers, with the ban to take effect in three years.

The move by the Democratic Party-led government, which took power last year pledging to pay more heed to worker and consumer rights than companies, would reverse deregulation implemented by the business-friendly Liberal Democratic Party in 2004.

Experts say counseling and training may help at the edges, in part by getting students to widen their job search beyond the "brand name" firms that many target in hopes of job security.

But critics argue restrictions on temporary workers will make the situation worse longer-term by forcing companies to flee abroad in search of cheaper, more flexible sources of labor.

"The labor market needs to be more flexible, accepting a variety of workers including temporary workers," said Yashiro, who advocates revamping the seniority-based wage system, for example by adopting equal pay for equal work.

"It's a choice between being unemployed and having an unstable job. But the government attitude is, stable or nothing."

Such changes, however, would be tough for the Democratic Party-led ruling coalition to push at present, given the importance of labor unions to the party's electoral base and a slide in government voter ratings due to doubts about Hatoyama's ability to make tough policy decisions.

"It's very difficult for a left of center government to have a growth plan that involves lots of labor market adjustment. They have a lot of labor money," said Macquarie's Jerram.

"It's too difficult if there is no political leadership to push the things that are necessary, but unpopular."

In the meantime, for students like Hiroki, who has applied to about 10 firms this time round, prospects are murky.

"Fewer of the places where I want to work are hiring this year," he said. "I don't really know what my chances are."

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