It is becoming increasingly clear that the economy is sinking deeper. Domestic sales of new vehicles in November plunged 27.3 percent from a year earlier. The U.S. National Bureau of Economic Research found that the U.S. recession had started in December 2007. As the U.S. and European economies are unlikely to recover in a short time, Japanese export-oriented companies will suffer. The employment situation is worsening, especially for temporary workers.
The ratio of registered job openings to registered job applications in October dipped by 0.04 point from the previous month to 0.8, the lowest since May 2004. Although the unemployment rate dropped 0.3 point from September to 3.7 percent in October, it is believed that there was no tangible improvement in the employment markets, since many people reportedly gave up looking for jobs.
The industrial production index for October declined 3.1 percent from September. The index for November is expected to see a 6.4 percent drop, the largest fall since the current system for taking statistics started in May 1973.
The current economic downturn is taking the largest toll on temporary workers. The labor and welfare ministry’s survey shows that about 30,000 such workers will lose jobs during the half-year business period ending March 31 as manufacturing firms, including carmakers and electronics makers, plan to dismiss a large number of temporary workers. A decline in both export and domestic demand is forcing companies to reduce production. The ministry also has found that about 330 university and high school students had their provisional contracts to be hired upon graduation canceled.
The government should examine what’s happening at workplaces and have companies rectify any inappropriate actions they took regarding worker dismissals. It also should implement measures to stabilize employment, administer vocational training for dismissed workers and find new jobs for them.
The Bank of Japan on Nov. 2 announced emergency measures to make it easier for banks to lend more money to companies. The BOJ and the government should take additional measures to prevent a credit crunch.
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