Japan's new graduates facing grim job prospects
A record one-third of Japanese university students graduating this spring have not found jobs, underscoring dwindling career opportunities for young people even as companies post robust profits.
The latest numbers released by the government Tuesday were so bad they prompted officials to couple the report with new measures to help jobseekers.
The reluctance of companies to hire is particularly worrisome for Japan's graduates because a person's first job out of college is a critical step that often determines a lifelong career with a single company. If you miss that step and get stuck in lower-paying part-time or contract work, full-time employment may never materialize, leading to lower wages and a lower standard of living.
The fate of young workers is also vital for the overall economy. Among the many problems tied to a rapidly aging population like Japan's is that older people tend to spend less. So Japan needs its younger generations to spend more to underpin private consumption, which accounts for more than half the economy.
The joint survey by the labor ministry and the education ministry showed that 68.8 percent of university students had secured employment as of Dec. 1 - the lowest level since 1996 when the government began collecting data and 4.9 percentage points worse than last year.
It's even tougher for junior college students. Less than half of those graduating in March have jobs, the report said. Officials surveyed 6,250 students at 62 universities and 20 junior colleges across Japan.
"We recognize that this is a serious situation," Chief Cabinet Secretary Yukio Edano told reporters.
The numbers are in bleak contrast to the solid recovery staged by corporate Japan over the past year. The collapse of Lehman Brothers and the recession that followed forced many Japanese companies to aggressively restructure, including cutting jobs and scaling back new recruitment. But thanks to strong global demand, particularly from China, exporters like Sony Corp. and Toshiba Corp. are making money again.
It hasn't, however, translated to a similar boom in hiring.
Toru Tozaki, a 21-year-old student at Tokyo's Teikyo University, doesn't graduate until next year. But he, like many other of his third-year peers, are consumed with the arduous and increasingly competitive job hunting process.
"I'm full of anxiety," he said.
Tozaki hopes for a job with a major electronics or construction company like Hitachi or Komatsu. But he knows he can't be too picky.
"It's a heavy burden," the economics major said. "I feel like my destiny for life is being decided."
Japan's unemployment rate stood at 5.1 percent in November, high by the country's historical standards.
A key central bank survey of business sentiment in December indicated that companies of all sizes believed they still had too many workers. Companies remain cautious about looming risks including a persistently high yen and uncertainty about the global economy.
Economists say that one of the reasons behind corporate Japan's reluctance to boost jobs is cost. Each hire is essentially a lifetime commitment for a company. There are training and education expenses, along with the fact that firing workers in Japan is difficult.
"It's a very expensive investment decision," said Hiromichi Shirakawa, chief Japan economist at Credit Suisse in Tokyo.
Lowering those hiring costs is a "key issue for increasing new hires," he said during a talk Monday at the Foreign Correspondents' Club of Japan.
Prime Minister Naoto Kan has identified jobs and reviving growth as priorities for his administration. The Cabinet last month approved a record 92.4 trillion yen ($1.11 trillion) draft budget, which followed a $61 billion stimulus package late last year.
"The budget for the next fiscal year includes various employment measures, so they should be enacted and implemented as soon as possible," Edano said. "I am confident that the employment situation can be improved."
The labor ministry said it will redouble efforts to support jobless students in the months before the school year finishes in March.
In a temporary expansion of a subsidy program first introduced last year, the government will offer companies money to hire graduating students. Companies can receive 100,000 yen ($1,200) for up to three months for each new graduate employed under a fixed-term contract. If a worker is then promoted to full-time regular status, companies will receive 500,000 yen.
The ministry will also organize nationwide job fairs featuring small and mid-size companies that may have been overlooked by jobseekers because they don't have the same name recognition as a Sony or Toyota.
Associated Press Writer Malcolm Foster contributed to this report.