Unemployment

A lot of workers must be afraid of losing jobs. Even self-confident workers brace for it somewhere in their minds. Especially when an economy is in recession, employees can be the first target for cutting costs because the personnel cost is one of the biggest in all expenditures companies pay. Nowadays in industrial countries, much is service-related work. As for Japan, the service sector accounts for over 60 percentage points in all the industries. Since the main corporate resources in that sector are human, the employees in today’s economies are more likely to suffer a blow in their working life.

To explain the Japanese job situations, the jobless rate has been rising in recent years mainly due to the economic slowdown. Japan has experienced the historical rate of 5.5% late in 2001. This rate was the highest since the government recorded it. The highest! It was almost equivalent to the unemployment rate in the United States when it experienced its historical economic boom in the middle of nineties. Anybody is suspicious of the Japanese jobless rate despite of the official announcement of the sluggish economy. The answer is that there is a difference in the ways of counting employed people. In the Japanese definition of the unemployment, the jobless are the people who don't work at all for the last one week to the end of the month(the jobless data is monthly) while they are looking for jobs. This unemployment number is based on the survey called Labor Force Survey. It makes a random sample to 40,00 households almost equivalent to 100,000 people. Among the surveyed population over 15 years old, the people who are applied to the definition above are unemployed. The real number would be higher in the western ways.

Moreover, there is a hidden number in the jobless people. It's in-house unemployment. As I explain in the previous case, one of the characteristics of the Japanese business is lifetime employment system. Once companies hire employees, it's hesitant to fire them although companies can do that legally. Consequently, there are still a lot of superfluous workers clinging to companies. If these people are included, the jobless rate will be too much higher.

Today's Japanese companies, however, have started driving employees out, seeing some foreign companies fire employees seemingly without hesitations. Companies with superfluous people, of course, need to take proper steps and take the greatest cares of how to fire the people. However, if companies give priority to stockholders by the principal of corporate governance, it's a natural course to squeeze profits by dismissing employees.

So what's a risk for workers in Japanese companies? As I mention above, in the job situation where Japanese companies have come not to hesitate fire employees, It's a risk of losing jobs. At the same time, there is a risk that the skills developed in one company are useless for another once you get out of there. The Japanese companies generally shift employees in different sections at a regular interval. This is the common companies' personal strategy to let them experience many jobs in order to bring up so-called as generalists. It’s pointed out that there is a lack of truly meant generalists with high-advanced management skills and deep knowledge in some special fields. But generally speaking, there seem to be few highly skillful managers. Be careful about company's personnel strategy if the company shifts you so often before your obtaining certain level of skills although you want to be a specialist or keep the position as a specialist in Japan.

<International Comparison in Unemployment Rate> (%)

Overseas Economy Data by Cabinet Office(seasonal adjusted)