The 2002 Edition of the White Paper on the Labour Economy

The Ministry of Health, Labour and Welfare has published the 2002
Edition of the White Paper on the Labour Economy. It features "Recent
trends in employment and unemployment, and their backgrounds" as its
sub-theme.

The White Paper first described how the Japanese economy had
regressed after October 2000, and showed that, while the employment
rates in the Western countries continued to drop, Japan saw its
overall unemployment rate rise sharply to 5.5% in December 2001.
At the same time, although Japan's unemployment rate is still low by
international standards, the White Paper suggested the possibility
that, should the unemployment rate continue to rise, Japan may slip
from "Economic Superpower" status to become just "an ordinary country".

The White Paper also described the characteristics of today's
unemployment patterns: high unemployment rates among young people aged
under 29 and among old people aged 60 to 64; and a four-fold increase
from 240,000 people to 920,000 during the past ten years in the number
of people unemployed for extended periods, defined as 1 year and over.
It also pointed out that the service industry's job creation rates,
which were at a high level during the 1980s, are now declining.

The White Paper attributed the high unemployment rate among young
people to the large number of college graduates landing jobs but
leaving them soon thereafter. The White Paper concluded that it was
because, with the employment situation deteriorating in the latter
half of the 1990s, many young people ended up working at companies or
in jobs with which they were not totally satisfied. The tendency for
the period of unemployment to lengthen began during the 1990s.
In FY2001, unemployment period lasted 4.3 months overall on average,
with 5.6 months for men and 3.1 months for women.

Concerning this prolongation of average unemployment period, the
White Paper warns of the danger that, once the number of long-term
unemployed persons increases, it becomes difficult to reduce it, and
that the unemployment rate may remain at a high level.

Moreover, the White Paper estimates that the 1 trillion yen reduction
in public works from 1980 to 2001 resulted in a loss of about 80,000
construction jobs. This had a major impact on the employment situation
in the regions, where a large share of workers is engaged in the
construction business.

The White Paper also studied "job creation through the opening of
new stores and establishment of new businesses" and "loss of jobs
through store closures and discontinuation of businesses." Throughout
the 1980s and 1990s, new jobs were created in a stable manner through
opening of new stores and establishment of new businesses. However, in
the 1990s, the number of jobs lost through store closures and
discontinuation of businesses began to increase. Although the number
of jobs created through the opening of new businesses or stores in
the service/restaurant sectors exceeded the number of jobs lost through
store closures and discontinuation of businesses, the two trends were
reversed in the construction and manufacturing industries.

The White Paper reveals that the average age of workers at the time
of store openings or business startups rose from 38.9 years in 1991
to 41.6 years in FY2000. Middle-aged workers aged 45 and older who
left their former jobs through corporate restructuring are playing
an increasingly important role in store/business openings. The White
Paper stresses the importance of providing these people with support/
assistance in opening new stores or starting up new businesses.

In addition, the White Paper releases the results of a corporate
fact-finding survey on the workforce reductions that companies are
so vigorously implementing. When asked what effects it has on the
companies and employees, 35% of the respondents felt that it "increases
productivity." However, they cited such adverse effects as "reduced
employee morale" (cited by the majority of the respondents), "increased
work hours" (cited by over 40% of the respondents) and "loss of talented
personnel" (cited by over 30% of the respondents).