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Japan's Jobless Rate Again Sets Record

Economy: Analysts say unemployment could continue to grow as more companies announce drastic cuts.

January 29, 2002|From Associated Press

Japan's unemployment rate reached a record 5.6% in December, as the nation's continuing economic slowdown dragged down corporate profits and chipped away at jobs.

With the nation battling a decade-long slowdown, the jobless rate has been hitting record highs almost every month since July when it reached 5%--the highest since the government began keeping track in 1953.

December's results, announced today, marked the fourth month in a row that Japan's jobless rate hit a record high. In November, the unemployment rate hit 5.5%, as jobs were lost in onetime mainstay sectors such as manufacturing and construction.

It hit 5.4% in October and 5.3% in September. The U.S. unemployment rate hit a six-year high of 5.8% in December.

For 2001, Japan's unemployment rate stood at 5%, also a record high.

For December, the number of unemployed people in Japan was 3.37 million, 390,000 higher than the same month last year.

The male jobless rate for December came in at a record high 5.8%. For women it was 5.1%, 0.2 of a percentage point higher than in November.

Analysts say the unemployment situation in Japan could worsen. Facing a global slowdown and pressured to cut costs, companies have been announcing drastic job cuts that have been rare in Japan.

The restructuring plans from companies in the electronics, banking and telecommunications sectors are expected to send tens of thousands of people out in the streets looking for work.

Hitoshi Suzuki, senior economist with Daiwa Institute of Research in Tokyo, said he is forecasting the unemployment rate rising as high as 6.4% through 2003.

Although the nation's corporate production may improve this year on the back of U.S. economic recovery and inventory adjustments at home, much of Japan's job problems are rooted in the need for labor to move from past thriving sectors such as manufacturing to emerging service industries.

"Unemployment is going to keep rising gradually," Suzuki said. "The joblessness that comes from structural causes is not going to go away."

Masato Chino, director of the government's labor statistics office, said the number of unemployed among heads of households is increasing. He also said that for the year 2001 there was a loss of 370,000 jobs in the manufacturing sector from the previous year, marking the ninth straight year of decline.

"The conditions for employment remain very serious," Chino said.

Prime Minister Junichiro Koizumi has reminded the public that growing unemployment is part of the pain that must come with his economic reforms.

Koizumi is trying to clean up the bad debts at the nation's banks and encourage competition in protected areas to put the country back on track toward stable growth without resorting to pork-barrel public works spending.

Both those measures could push unemployment higher.

Jun Ohmi, a spokesman for Pasona, a Tokyo-based temporary employment company, said people looking for temporary jobs were nearly all women until just a few years ago, reflecting the corporate culture here that placed men in lifetime jobs.

Recently, the number of men looking for temporary jobs is slowly increasing, he said.

"The pain that accompanies structural reforms is expected to grow," Ohmi said. "Unemployment has grown into a serious problem."

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