Business

Japan's 'ice age generation' urges revamp of state hiring push

by Satoshi Iizuka

Kyodo

The government announced a plan in June to find 300,000 permanent jobs for those who got stuck in the prolonged “employment ice age” that was triggered by the collapse of the bubble economy in the 1990s, but critics are skeptical about how effective it will be and are urging a revamp.

The plight of the ice age generation mainly stems from Japan’s practice of hiring new university graduates en masse, labor experts say. The unique system has long served as the backbone of Japan’s traditional lifetime employment system and seniority-based wage hikes.

When the bubble economy imploded, leading to Japan’s “lost decade,” the chances of landing a such a job fell greatly. The malaise led to a significant rise in unemployment from the early 1990s through the early 2000s. The people in this age bracket, also dubbed the “lost generation,” have since been working part-time or as contract workers. Their incomes are typically low, making it difficult to marry and have children.

A man in his early 40s living near Tokyo believes his age will prevent him from finding a better, permanent job even if he tries. He said the biggest problem is that the system has made it difficult for people who are over 30 but lacking the skills and job experience commensurate with their age to secure stable employment, saying his generation just “tumbled” into the ice age.

According to government data, there were 16.89 million people in Japan between 35 and 44 — the cohort comprising the generation — in 2018. Of them, 3.71 million were employed on a nonregular basis, with 500,000 seeking regular jobs, and about 400,000 were not engaged in employment, household labor or studies. About 9.16 million held regular jobs.

The man, a graduate of Tokyo’s Gakushuin University, started his career at an auto parts maker in 2001. After the collapse of U.S. investment bank Lehman Brothers Holdings Inc. ushered in the 2008 global financial crisis, his company first laid off the nonregular workers, including Japanese Brazilians.

He was then transferred from a post in charge of accounting to a production line, before being dismissed at age 31 in 2009.

Learning bookkeeping skills while searching for a new job, he found a post managing a driving range in 2010 but was let go after a few months because he didn’t have the practical bookkeeping experience the golf company wanted.

Eventually, he found a job at a public entity and held onto it for nearly a decade.

Hideo Kumano, executive chief economist at Dai-ichi Life Research Institute, pointed out that the difficulties faced by the ice age generation have led to an increase in low-income households.

Regularly employed workers in their early 40s earn an average of 1.92 times more than their nonregular counterparts and 1.29 times more than nonregular workers in their early 20s, he said, citing a government survey.

Government officials admitted that the initiative to find regular work for 300,000 ice age workers isn’t just meant to improve incomes, but also to tackle the nationwide labor shortage. Japan opened its doors wider to foreign labor to address this problem by expanding the visa system in April.

If the ice age generation remains unable to find full-time work, they won’t generate much tax revenue and will likely seriously destabilize the social security system, including the public pension system and welfare benefits, the officials said.

But Yusuke Shimoda, senior economist at Japan Research Institute, said if the government merely attempts to use these long-deserted workers to cover shortages in such demanding and low-paying sectors as nursing care, the plan will not benefit them.

Critics say the Abe administration suddenly came up with the measure as a tactic for the House of Councilors election on July 21, claiming another proposal long championed by the opposition camp as one drafted by Abe’s conservative Liberal Democratic Party instead.

“If the government really wants to support 300,000 people, it has to oblige corporations to hire them and provide subsidies,” said the Gakushuin University graduate who declined to be named.

The government plans to set up special consultation centers at job-placement offices for people from the generation, offer training programs and strengthen corporate hiring incentives via subsidies.

A 46-year-old man in Osaka said he thinks the plan is unlikely to bear fruit as many Japanese companies want to recruit younger people and are reluctant to hire those over 40.

After working for several companies in Tokyo between 1997 and 2004 on regular contracts, he returned to his hometown in western Japan to take care of his mother, who had lung cancer, and started working on a nonregular basis.

“If you give up regular employment, it is really difficult to return to that path,” said the man, who asked not to be named.

Shimoda of Japan Research Institute warned that the issue is sensitive and has to be dealt with carefully as many in that generation, including himself, remain distressed.

“My point is that it is necessary to provide support depending on each individual’s wish, rather than just securing regular posts uniformly,” said the 39-year-old economist, adding that improving labor conditions for nonregular workers via wage hikes and other steps is also needed.

Municipal and other governments, meanwhile, are taking their own steps to help the ice age generation find stable employment.

The city of Takarazuka, Hyogo Prefecture, has decided to restrict its regular administrative staff posts to candidates from the ice age generation, with three expected to be hired in January.

The Aichi Prefectural Government has adopted a similar system.

Takahiro Izui contributed to this report.