Homeless man in Tokyo
The unemployment rate was round 2 percent in the 1970s and around 2.7 percent in the 1980s. It was 3.4 percent in 1996 up from 3.1 percent in 1994 and 2.1 percent in 1992.

Unemployment rose through the 1990s and early 2000s and peaked at 5.5 percent in 2002. The rates would have been much higher if the government and business had taken steps to reform the economy to pull the country out of recession.

Unemployment stood at 4.5 percent in May 2011, down 0.2 percentage points from the previous month. Unemployment stood at 4.6 percent in February 2011. Vacancies were up but 240,000 people were still unemployed. Unemployment was 4.9 percent in January 2011, 5.1 percent in October 2010 and 4.9 percent in February 2010.

Unemployment reached 4.4 percent in December 2008 and 4.8 percent in March 2009 and 5.2 percent in May 2009 during the global financial crisis. The May 2009 ratio of jobs to job seekers of 9.44 was the lowest since data for that figure started being collected in 1963. Unemployment was 4.4 percent in June 2005 and 4.1 percent in August 2006 and 4 percent in February 2007. The unemployment rate fell to 3.6 percent in August 2007, the lowest level since February 1998.

Many think that the official unemployment rate at that time was not accurate. A more realistic figure of between eight and 10 percent, some said, would have included those who had given up looking for work and workers who were forced to take dead end part time jobs. The number of Japanese who have given up looking for work is npw estimated to be around 3 million.

Unemployment in recent years has been caused by recession, cost cutting measures and the movement of production abroad where labor is considerably cheaper. Companies have been relying more on part timers and temporary employees while young people have been forced to tale part time jobs rather than career jobs. In China, workers are paid 5 percent of the wages given Japanese workers for doing the same job.

The unemployment rate among young people in 9 percent. Even those who have jobs often have low-paying temporary jobs. In the worst cases they get paid so little they can’t pay the rent for an apartment and have to take graveyard shifts or sleep in all-might coffee shops.

Research in 1999 found that Japanese who lost their jobs and insurance were twice as likely to suffer from poor health than those who didn’t.

Workforce Expected Fall by 8.45 Million by 2030

The number of employed people may drop by as much as 8.45 million by 2030 from the 2010 figure of 62.98 million, according to a labor ministry panel of experts studying the country's employment policy. In its report unveiled, the panel emphasized the need for the government to help women and young people find and secure jobs because the decline in employees is likely to hinder the nation's economic growth. [Source: Yomiuri Shimbun, July 24, 2012]

“The estimate of a maximum contraction of 8.45 million was made on the basis of assumptions that economic growth will remain at zero percent and the number of working women and elderly will remain unchanged through 2030. On the other hand, if the economy keeps growing at about 2 percent in real terms, while the proportion of working women and elderly people rises from 2010 levels, the decline in employed individuals over the 20-year period is projected to be 2.13 million.

“The Health, Labor and Welfare Ministry's panel said it is important to help women raising children to find work, while at the same time extending support to help secure jobs for the elderly. To create jobs, the panel said it is necessary to support domestic manufacturing businesses, a sector that is being hollowed out at an accelerating rate as operational footholds are shifted abroad to cut costs and remain internationally competitive.

Laying Off Workers in Japan

Countries where it is hardest to fire workers: 1) Portugal; 2) Norway: 3) Japan; 4) South Korea; 5) Italy. [Source: OECD]

Some downsizing has taken place in Japan but more can be done. According to some estimates 5 million jobs can be cut nationwide. In the early 2000s, some large companies had 10,000 "in house unemployed," about 15 percent of all employees. It was estimated that if only half of "nonworking jobholders" lost their jobs, unemployment levels would double. It has been suggested that safety net payments for displaced workers should be raised to make unemployment more palatable.

Lay offs are a humiliation and widely seen as an setback almost impossible to overcome. Lifetime employment has traditionally been seen as an entitlement and laid off workers consider their careers over when they loose their jobs.

Workforce cuts whenever possible are made by encouraging old employees to take early retirement and hiring fewer new workers. Many workers or their families have enough money stashed away to see them through rough times. Many workers continued to feel a sense of loyalty to their companies even after the laid off.

Instead of giving employees pinks slips, Japanese companies preferred less direct ways of getting rid of unwanted workers. Companies such as Toshiba and Toyota have offered "voluntary" retirement schemes or "reassigned" workers to dead end projects that send a clear message their time was over.

Some companies shift white collar workers to their production lines and "farm out" workers to new companies. The new employers might pay 60 percent of the employees salary and the old employer pays 40 percent. Workers that have survived restructuring have found themslves saddled with an increased workload.

Unemployed Pretenders in Japan

Middle-aged employees have the hardest time finding new jobs. Some feel they will not be given a second chance. One former salaryman, laid off from his real estate company, told the New York Times, "Suddenly, I couldn't imagine what I would do next. Income was not the problem. The question was what could a company man like me in his 40s do with the rest of his life." [Source: Howard French, New York Times Magazine]

Some are so embarrassed by their unemployment they pretend they have a job by staying away from home all day and spending their time in a park or a library. Some can't bring themselves to tell their wives and families of their situation. Other want to keep up appearances in front of their neighbors.

The unemployed real estate salaryman was sucha pretender. When he was interviewed he spent much of his time in a public library and maintained the illusion of working to save his live-in mother the embarrassment of being known as the mother of an unemployed son. He said, "No one in my family has told anyone that I've been let go . We would prefer that they not know anything . There is no need."

Japanese Labor Relations

The relationship between employers and employees in Japan seeks to avoid confrontation. While conflicts of interest occasionally arise between executives and workers, Japanese companies aim to create a family atmosphere wherein consensus is encouraged. Another factor contributing to the sense of unity among company employees is that within the same company differences in income levels — between managers and workers or white- and blue-collar workers — are much smaller in Japan than in most other countries. [Source: Web-Japan, Ministry of Foreign Affairs, Japan]

“Close teamwork has also helped advance quality control in the manufacturing sector. Workers who feel secure at their jobs are able to work closely with one another and make suggestions to management. Fair distribution of corporate profits also provides workers with greater incentives to improve their efforts at quality control. Many Japanese companies also encourage employees to use a portion of their monthly wages to purchase shares of company stock, reinforcing the feeling that they have a personal stake in the company.

These days, strikes are rare. When there is one it often scheduled weeks in advance often called off to minimize public inconvenience. Airline strikes, for example, are scheduled so they don't disrupt flights too much and are called off completely during peak travel times like Golden Week.

Companies customarily decide wage levels through negotiations between labor and management. “Shunto”, or spring offensive, is the term used to describe the spring negotiations between management and labor unions for wage hikes. In recent years there has resistance by managements to the idea of giving workers regular pay hikes. It prefers instead to give dividends to stockholders to encourage investment in the companies. Unions want companies to give a share of their profits to workers.

“The Spring Labor Offensive is a familiar practice in management-labor relationships in Japan. Held since 1956, various unions make their demands somewhat simultaneously in spring. Another widely established labor management practice is the joint-consultation system, a procedure that involves a large majority of Japan’s workforce. While there is much variation within this system, it permits employees and executives to work out a management plan and decide on the levels of salaries and bonus payments through joint consultation. In addition to attaching importance to human relationships, it encourages employees to regard themselves as fully participating members of the enterprise.

Unions in Japan

Labor unrest in the 1950s
Unions were legalized in Japan in 1945 by the U.S. Occupation authorities. Strikes in the 1940s and 50s won workers wages increases, job security and health benefits. There were serious strikes, particularly in the steel industry, where on average a worker died every day and no benefits were given to families. Management fought the unions not only for business reason but also because unions were viewed as havens for Communists.

Most Japanese labor unions are organized not along industry-wide job specialty or occupational lines, but as enterprise unions with membership restricted primarily to regular, full-time employees working in a single company and its affiliates. An individual company's enterprise union generally belongs to an industry-wide union federation, one example being Un'yu Roren (All Japan Federation of Transport Workers' Unions), and that federation in turn usually belongs to a national, cross-industry labor federation. [Source: Web-Japan, Ministry of Foreign Affairs, Japan]

“The largest of these is Rengo (Japanese Trade Union Confederation), which was established in 1989 and had 6.73 million members in June 2010, down from 8 million members in the 1990s. It is one of the biggest supporters of the Democratic Party of Japan political party. Japan has over 26,000 unions, but only about one worker in five presently belongs to a union. The figure was approximately 35 percent in 1975 and still one in three in the 1990s. The decline is due, in part, to a falloff in the percentage of workers in manufacturing and other industries that tend to be highly unionized, and, in part, to an increasing number of young employees who prefer to abstain from union membership.

Rengo engages in annual shunto talks to gain higher wages and benefits for its member, with its leaders negotiating directly with Nippon Keidamren, Japan’s largest business organization. Labor leaders have complained that the benefits of the recent economic upturn have been passed on mainly to shareholders and managers not ordinary workers as wage increases.

Book: “The Wages of Affluence — Labor and Management in Postwar Japan” by Andrew Gordon (Harvard University Press, 2000)

Irrelevance of Unions in Japan

20100501-Minsitry of Health, Labor, D-MIN08-03 Japan Photo.jpg
Ministry of Health, Labor...
As Japanese companies have become like American companies in the way they treat their employees and globalization and competition from abroad have made the business world more cut throat and risky, labor unions have lost their relevance and power. They have done little to stem the movement in the workplace towards the use of more dispatch, temporary and nonregular workers and ahve done little to help these workers when they have a hard time. Their negotiating strategies’such as asking for large raises and concession when companies were suffering during the global financial crisis in 2008 and 2009 — also raise doubts about how touch with reality they are.

Many unions see protecting their workers interests as one in the same with protecting the company. This is especially true when companies face restructuring and unions and companies use their political connection to subsidize the companies to keep them afloat and keep workers employed.

Many unions have become controlled by the management of the companies they are supposed to fight. This was made by possible by the establishment of rival unions, family organization and workers clubs set by management that undermined their authority of the traditional unions and the infiltration of unions by pro-company workers. Workers who have fought management have been denied promotions.

Image Sources: 1) 2) 4) 5) Visualizing Culture, MIT Education 3) 8) Ray Kinnane 6) Rob's Gallery, The Faq Japan 7) Goods from Japan 8) Twin Isles

Text Sources: New York Times, Washington Post, Los Angeles Times, Daily Yomiuri, Times of London, Japan National Tourist Organization (JNTO), National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

Last updated October 2012

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