Japan's hidden unemployment

Employment policy is a major issue in the November 9 House of Representatives general election.

Prime Minister Koizumi Jun'ichiro and the ruling coalition parties are trying to emphasize that the job market is improving with about 2 million jobs created mainly in the service sectors.

But a big question mark hangs over their outlook for Japan's employment situation, according to Akahata of October 21 in an analysis of the hidden aspects of the present situation.

The unemployment rate in August stood at 5.1 percent point, down 0.2 percentage points from the previous month, with the ratio of job openings to job applicants also showing some improvement.

Hidden unemployment on the rise

The government statistics indicate that the unemployment rate is falling. The problem is that these figures do not necessarily mean that the number of jobless people has decreased. On the contrary, there is a sharp increase in the number of people who give up seeking jobs due to a scarcity of jobs they are looking for. These people are without jobs but are not counted as unemployed because they are not counted as persons in the labor force.

In 2002, the number of hidden unemployed increased by 1.04 million from 680,000 in 2001. In August 2003, the number increased by 770,000. Total payrolls fell by 380,000, in 2002, the first drop in three years. The number was reduced by 160,000 from the same month of the previous year.

Although there were several months that showed some improvement as Prime Minister Koizumi stated, the question remains. The ratio of registered job offers to registered job applications for August was mainly for part-time jobs. If part-time jobs had not been counted, the ratio would have sharply declined. This means that part-time job offers outnumbered job seekers, but full-time jobs are available only to half of job seekers. Most jobs offered are low-paying unstable part-time jobs.

This cannot be regarded as an improvement in the job market. On the contrary, employment conditions in Japan are steadily turning for the worse.

Payrolls are falling

Prime Minister Koizumi in his speeches touts the estimate of 2 million jobs created in the last three years in and around the service sector as an "improvement". The Liberal Democratic Party's election platform emphasizes that 2 million jobs have been created. The statement gives much room for doubt.

First, although the Koizumi Cabinet is only two years and a few months old, it inflates the number by presenting figures for the last three years. Second, even the government's inter-agency team for the creation of 5.3 million jobs has estimated that only 920,000 jobs at best were created in the last two years.

What really matters to the people is how many job opportunities in total are added in society.

A breakdown by industry of the number of employed through FY 2001 through FY 2002 as given by the government labor force study shows that payrolls are falling as follows: decrease in employment: 460,000 in retail, wholesale, retail, and restaurants; 280,000 in construction; 270,000 in forestry and agriculture; and 60,000 in finance, insurance, and real estate. The service industry is the only sector that showed an increase and the number was 680,000. In total, payrolls decreased by 1.35 million.

The real problem is that there is a deep employment crisis that leaves no justification for claims of "two million jobs created". The government must understand how hard it is for workers to maintain their jobs and for young people and job seekers to find jobs.

Responsibility of large corporations

Major corporations form the largest group that tries to secure as much profits as possible through job cuts in the name of "employment adjustment". Large corporations dismiss workers in the name of corporate restructuring and force employees to work overtime without pay. If these corporations have so much work as to require overtime work, they should add more people to their payrolls to fulfill their social responsibility.

Neither the LDP nor the Democratic Party of Japan, however, refers to corporate social responsibility. Only the Japanese Communist Party takes up this issue against large corporations. (end)