Jobs still plentiful in Japan

May 29, 1994|By Merrill Goozner | Merrill Goozner,Chicago Tribune

TOKYO -- Amid all the ballyhoo about the current downturn being Japan's worst since the end of World War II, a simple fact has been overlooked: The Japanese economy continues to add jobs at a healthy clip.

The jobs are coming from expected quarters: restaurants, discount retailers and other parts of a booming service sector that shows little sign of cooling off.

New housing aimed at the young and spacially constrained has been another source of sustenance for hungry job seekers. Despite a sharp falloff in industrial and commercial construction, building companies have continued to add jobs over the last year as housing starts reached their highest level in three years.

New jobs in these sectors have more than offset job losses in manufacturing, where hard-pressed firms, hammered by a strong yen, are moving assembly to low-wage areas of Asia, cutting new hiring and encouraging workers to retire early. Japan has trimmed 4.7 percent, or 640,000, of its manufacturing jobs in the last two years.

The big winners have been services such as medicine, care for the elderly, engineering and software development, which added jobs in the last year; the wholesale, retail and restaurant trade, which added 200,000 jobs; and construction, which added 50,000 jobs, according to a February survey conducted by the Labor Ministry.

Total employment in Japan stood at 63.02 million jobs in February, 160,000 more than a year earlier. The unemployment rate rose to 3 percent from 2.4 percent because the labor force, fed by declines in the number of people working on farms and self-employed, rose at a slightly faster pace.

"Labor is being reallocated from manufacturing to growing sectors like construction, retail and services," said Jeffrey Young, an economist for Salomon Brothers Japan Ltd.

And there's more coming as Japan's consumer revolution picks up steam. At discount eyeglass retailer Paris Miki Corp., for instance, company officials expect to add 250 jobs this year, a 10 percent increase in the work force, and 100 stores to its 565-store chain.

The firm also needs more skilled workers as an increasing number of Japanese consumers develop a taste for Western-style designer glasses.

"As individualization among consumers advances, we need to have sales consultants who can tailor the product for each customer," said Jiro Ono, director in charge of personnel. Daiwa Housing Industry Corp. added 277 jobs in the last year, bringing employment to 10,906. The Osaka-based firm plans to add another 600 this year and 700 in 1995.

The Japanese licensee for the Denny's restaurant chain plans to add 44 restaurants to its 398-store chain this year, helped by lower land costs after the speculative excess of the late 1980s and early 1990s that sent real estate and stock prices soaring to unsustainable levels.

To help staff the new restaurants, Denny's plans to increase university recruitment to 200 graduates from 160 a year ago and 75 in 1992.

"We need new graduates that we can train to be store managers," said Shigetaka Iikubo, general manager of the planning department.

Economists are divided on the future direction of the Japanese labor market, in which a gradual shift from manufacturing to services has been under way for some time.

In the United States, that shift was much more rapid and was marked by a sharp falloff in manufacturing employment. Millions of jobs were lost during the recessions of the early 1980s and early 1990s, and it took years before service-sector job growth made up for the losses.

But in Japan, manufacturers, even after two years of recession, still employ nearly 1 million more people than they did in 1987. Some economists think the worst is still to come for goodsmakers.

"If the current exchange rate persists, I don't think Japan can sustain this level of manufacturing or this level of full employment," said Haruo Shimada, a professor of labor economics at Keio University. "We're only expecting 1 percent growth in the economy this year, and the labor market has yet to feel the aftermath of that."

Other economists put more faith in the ability of the bureaucrats at Japan's powerful economic ministries to shepherd the economy through its current rough patch. "The elements are in place for an economic recovery this year," said Salomon's Young.

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