Japan leads the world into depression

IF THE world’s biggest economies were competing in a race towards total financial collapse, Japan would now be in the lead. Having triggered this crisis and effectively set the pace, the United States is falling behind a nation that has already passed the point of recession, and is well on its way to a potentially great depression.

The Japanese economy contracted by 3.3% in the last quarter of 2008, a rate unheard of since the oil shock of the mid-1970s. Exports fell by 45% this past January alone, to the lowest level ever recorded. Unemployment is quickly rising up and over 5%, with some of the country’s most renowned and reliable companies – Nissan, Sony, Panasonic – predicting tens of thousands of job losses by the end of this year.

For half a century, Japan’s brand of post-war capitalism rested on the promise of employment for life, and a system of corporate welfare by which businesses would provide for their workers up to and often beyond retirement.

“Until recently, our society was very stable,” says Hori Yasuo, a former English teacher turned union organiser. “We believed we could stay with one company for our whole career. That belief has disappeared, and people work every day with uncertainty.”

Japan’s notoriously high suicide rate is moving upwards – and of the 33,000 who killed themselves last year, more than half were unemployed.

Of the 300,000 people who have lost their jobs since October, the majority have been short-contract or “non-regular” workers, ineligible for benefits or legal protections.

These kinds of jobs were themselves a product of the late 1990s and the prolonged recession that eventually caused the government to relax certain labour laws, and allow for US-style deregulation. Combined with a belated but merciless audit of the banks in 2003, such measures were generally credited with helping the country out of its rut, while keeping unemployment low and living standards relatively high.

No provision was made, however, for the possibility of this new global downturn, which has effectively wiped out the foreign markets for almost every major Japanese export, particularly cars and electronics.

Non-regular workers have been the first to go, and have also in many cases been forced out of the company accommodation that often comes with a short-term contract, resulting in a sudden rise in homelessness, which has always previously been rare in Japan.

“The government neglected to prepare any kind of safety net for employees without social insurance, or to make companies pay on their workers’ behalf,” says Yasuo. “So yes, the problem is global, but domestic policy failures have perhaps made the situation more serious for Japanese workers than for Europeans.”

A general election must be held before next October, and the ruling Liberal Democratic Party (LDP) will almost certainly be removed from power for the first time in more than 50 years (with the exception of nine months in 1993). But nobody really believes that their ascendant rivals, the Democratic Party of Japan will be any better. Most are disgruntled former members of the LDP, with much the same ties to corporate interests as their rivals.

But Japan is already changing – and not for the better. When traditional full-time “salarymen” start losing their jobs, as now seems inevitable, a way of life will come to an end. In the meantime, it’s becoming impossible for young Japanese to even begin that way of life.

“You can still find work,” says architecture graduate Shima Kobayashi, “as long as you don’t care what kind of job you do. But it’s not a good time to be looking for a good one.”

And she adds: “I don’t really care who is in power, but I think they should start by cutting their own salaries.”

JAPAN: From Stephen Phelan in Tokyo
10:17pm Saturday 7th March 2009

Source: Sunday Herald

Leave a Comment