The number of mining, manufacturing and construction workers has reverted to mid-1960s levels, according to a preliminary report on the 2005 census the government released last week.
The drop in the so-called secondary sector is being caused partly by the shifting of production overseas and accelerated workforce reductions, the report says.
The secondary sector, which covers the mining, manufacturing and construction industries, had 15.93 million workers in 2005, down 14.2 percent from 2000, when the previous census was conducted, according to the Internal Affairs and Communications Ministry. In 1965, the sector employed 15.12 million, it said.
The number of workers in the sector exceeded 20 million in the 1990s, but has dropped because Japanese manufacturers have been transferring operations overseas.
Manufacturers therefore accounted for 10.46 million workers in 2005, down 12.8 percent from 2000. The number of construction workers also suffered a sharp drop, slumping 14.4 percent to 5.43 million.
Although workforce reductions have prompted many manufacturers to farm out entire operations to contract workers, employees of the contractors are being classified as service industry workers, thus part of the tertiary sector.
Hisashi Yamada, a senior economist at Japan Research Institute, a private think tank, warned that the sharp drop in skilled laborers will make it impossible for future employees to upgrade their manufacturing skills, which he called the very base of Japanese competitiveness.