No relief in sight as Japan`s youth joblessness rises

Big Site, a large exhibition facility in Tokyo’s Koto District, on Dec. 1 filled with 16,000 college students clad in suits and ties. They gathered for a joint job fair organized by 243 companies that sought new staff to join them in 2014.

Nearly 200 students were seen packing in front of First Retailing, the apparel maker famous for the Uniqlo brand.

College juniors are undergoing the toughest time in their lives in their “war of employment,” as companies began recruiting this month in compliance with guidelines set by the Federation of Japanese Industries. Applicants will be interviewed from April next year and preliminary selections will come from October next year.

Since just half of college students will have a chance to get preliminarily appointed, however, so job seekers at Big Site looked very anxious.

○ Youth jobs disappearing

Japanese college students normally begin to look for jobs after their junior year and acquire the results around the end of their senior year. As of this year, 63.1 percent of them confirmed preliminary employment, up 3.2 percentage points from last year. The ratio of preliminary employment, however, has been on the decline overall since hitting 73.5 percent in 1997.

If students spend another year to find work, they must compete with lower classmen, which in turn lowers their chances to land jobs. For this reason, students who failed to win preliminary appointments choose to take non-regular posts.

According to the Japanese Education, Culture Sports and Science Ministry, among the some 560,000 students who graduated from college in March this year, about 128,000, or nearly a fourth, took temporary or part-time jobs. As recently as 20 years ago, just one in 20 had to take non-regular posts.

Eight office workers in their 20s and 30s gathered at a drinking party in Kyoto`s Shibuya district with a Dong-A Ilbo reporter late last month. None of them were permanent staff; instead, they were temporary workers or freelancers at banks or other employers.

After Prime Minister Junichiro Koizumi adopted U.S.-style neoliberal reform in the early 2000s, the number of temporary posts has surged.

According to Japan’s statistical office, the number of jobless people in October reached 2.71 million, or 4.2 percent of the economically active population. But the rate would surge to 7.5 percent if the age bracket is lowered to those aged 15 to 24. This is far higher than Korea`s unemployment figures of 2.8 percent overall and 6.9 percent for youth.

○ State employment policy focused on middle-aged people

Unemployment is worsening in Japan because middle-aged people have a strong grip on the job market. The Japanese Diet passed this year a revision bill to the Employment Stability Act that obliges companies to hire staff aged 60 or older until age 65. This act will take effect in April next year.

In a recent survey by the Federation of Japanese Industries, more than a third of companies said they will reduce employment of young people if they must continue employment through age 65.

Reinforcing the privileges of permanent staff is also depriving youth of job opportunities.

Keio University professor Heizo Takenaka recently told the Japanese business daily Nihon Keizai Shimbun, “Since it`s difficult to lay off people, permanent staff in Japan have become workers with the world`s most stable job security, but this has led to the expansion of non-regular employees.”

Another problem is that manufacturing and construction have failed to absorb young jobseekers due to the country`s economic slump. With the warning of the success of Japanese manufacturers, Sony has laid off 10,000 staff early this year, while Panasonic also recently said it will let go of 40,000.

The number of employed in manufacturing reached 10.39 million in October, down 60,000 from the same month last year. Since the collapse of U.S. investment bank Lehman Brothers in late 2008, nearly 1.7 million construction jobs have disappeared in manufacturing and construction.

The growing ranks of jobless youths will lead to lower tax revenues and higher welfare costs. For this reason, Japan`s central and provincial governments are striving to create more jobs for young people. Tokyo`s Adachi district is offering free classes on responding to phone calls and doing job interviews for those seeking part-time jobs.

Yet as long as the Japanese economy continues to slump, the younger generation will likely take the brunt of the shock.

lovesong@donga.com