The internal affairs ministry on Feb. 1 released statistics with a symbolic meaning for the Japanese economy. The ministry’s labor force survey showed that the number of people working in the manufacturing industry in December 2012 dipped below 10 million for the first time since June 1961. This represents a reduction of some 40 percent from the peak of 16.03 million in October 1992. These statistics underline the structural difficulties Japan’s manufacturing firms are facing.
The government needs to push policies to strengthen employment bases for such industries as medical and nursing care services, child-rearing support, green energy-related business, agriculture, fisheries and forestry while encouraging manufacturers to produce attractive and competitive products.
In December 2012, 10.35 million people were working for the wholesale and retail industries followed by 9.98 million for the manufacturing industry and 7.23 million in medical and nursing care services. There were 4.9 million workers in the construction industry, 3.86 million in hospitality services and 1.91 million in information and communication technology.
The number of workers in medical and nursing care services was some 2.5 million larger than in 2002, when the current occupation division was adopted. The increase apparently reflects the needs of a graying population. While information and communication technology increased its workforce by about 300,000 from 2002, the manufacturing industry suffered a loss of about 2 million and the construction industry a loss of about 1 million.
The general trend is a decrease in employment in manufacturing and construction as workers move to the service sector.
A combination of factors is contributing to a greater burden on manufacturing companies, including a stronger yen, power shortages because of the suspension of nuclear power plant operations and tax measures to combat global warming.
Some executives complain of high corporate taxes and too-strict labor regulations. The domestic market is shrinking due to a swelling population of older people and declining wages amid the long period of deflation. Efforts by manufacturing firms to increase productivity have led to production methods in which workers carry out multiple tasks, thus leaving less demand for labor.
Manufacturers are moving factories to foreign countries that have lower labor costs and are close to growing markets. Some firms, especially in the electronics industry, have closed big factories and dismissed workers due to poor business results.
Companies equipped with the skills and technologies that produce attractive products for reasonable prices are likely to survive. But even if the manufacturing industry picks up, overall employment in Japan may not increase if investments, as expected, continue to go abroad.
The government may have to take a realistic policy of helping ease the shift of workers from manufacturing to the service sector by improving vocational training. Wages in the service sector, including nursing care services, also must be increased to attract more workers and ensure they can have a stable standard of living.