Monday, February 09, 2009

In Japan, New Jobless May Lack Safety Net

OITA, Japan — Koji Hirano said his “mind went blank” with disbelief when he and other workers at a Canon digital camera factory in this southern city were suddenly called into a cafeteria in late October and told they were being laid off.

The shock turned to fear when they were also ordered to vacate their employer-provided apartments, a common job benefit here. With no savings from his monthly take-home pay of as little as $700, he said, he faced certain homelessness.

“They were going to kick us out into the winter cold to die,” said Mr. Hirano, 47.

The current economic crisis has spread joblessness and distress across the world, and Japan has been no exception — with output plunging at historic rates, the unemployment rate leapt to 4.4 percent in December from 3.9 percent the month before. But what has proved more shocking has been the fact that so many of those laid off have been so vulnerable, with hundreds and perhaps thousands finding themselves cast into the streets.

Mr. Hirano and the others laid off by Canon are part of a new subclass of Japanese workers created during a decade of American-style deregulation. As short-term employees they have none of the rights of so-called salarymen or even the factory workers for Japan’s legions of small manufacturers.

To make matters worse, they can expect little in the way of unemployment or welfare benefits. In Japan, a country with little experience of widespread unemployment until recently, there is an inadequate safety net for laid-off workers.

According to the Labor Ministry, about 131,000 layoffs have been announced since October. Of those, only about 6,000 were culled from the majority of Japanese workers who hold traditional full-time jobs, which are still often held for life. The overwhelming majority — some 125,000, the ministry says — are so-called nonregular workers, who are sent by staffing agencies or hired on short-term contracts with lower pay, fewer benefits and none of the legal protections against layoffs of regular full-time employees.

Mr. Hirano and other former temporary workers at Canon were allowed to stay in their apartments for a few extra months after a public outcry reached all the way to the prime minister. But others have not been so lucky. Over the New Year holiday some 500 disgruntled former temporary workers made homeless by layoffs built an impromptu tent city in a Tokyo park adjacent to the Labor Ministry.

As never before, the global downturn has driven home how a decade of economic transformation has eroded Japan’s gentler version of capitalism, in which companies once laid off employees only as a last resort.

“This recession has opened the nation’s eyes to its growing social inequalities,” said Masahiro Abe, a professor at Dokkyo University who specializes in labor relations. “There is a whole population of workers who are outside the traditional support net.”

Until a decade ago, nonregular workers accounted for less than a quarter of Japan’s total work force, and included subcontractors and others outside the lifetime employment system as well as students or homemakers working part-time jobs at restaurants or convenience stores.

But the number of nonregular workers took off after an easing of labor laws in 1999 and again in 2004 allowed temporary workers to work on factory lines and in other jobs once largely restricted to full-time workers. During Japan’s economic recovery in this decade, companies added millions of less expensive temporary employees while continuing to reduce overall numbers of full-time staff.

Today, 34.5 percent of Japan’s 55.3 million workers are nonregular employees, including many primary breadwinners for households, according to the Internal Affairs Ministry.

Under the nation’s traditional company-centered social welfare system, created after World War II, companies were expected to look after employees until retirement and beyond, serving as the main conduit for pensions and other benefits, and keeping jobless rosters empty by not laying off workers.
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