The government's fiscal 2009 white paper on the economy has drawn a gloomy picture with regard to the employment situation, although the report does credit the government's four economic stimulus measures for starting to exert a positive effect.

The Japanese economy has deteriorated at unprecedented speed since the onset of the U.S. financial crisis in the fall of 2008. The white paper notes that the number of excess workers at Japanese enterprises is estimated to have risen to a maximum 6.07 million in the January-March period of 2009, the highest level since 1980. Of these excess workers, up to 3.69 million are believed to have been in the manufacturing sector, up from about 60,000 a year before.

By comparison, there were a maximum 380,000 excess workers for all sectors in the first quarter of 2008.

The report warns that if production fails to pick up soon, a large number of workers could lose their jobs. In May, Japan's unemployment rate was 5.2 percent. There is fear that the rate may top 6 percent, worse than the record 5.5 percent. The report says that reduction of working hours has reached the limit. If 6.07 million workers lose jobs, the unemployment rate would jump to around 14 percent.

The report also pays attention to widening economic gaps among workers. The unemployment rate for dispatched workers increased to 19.4 percent in the first quarter of 2009 from 5.8 percent a year before. In contrast, the unemployment rate for regular workers stood at 2.4 percent in the first quarter of 2009. The report opposes strengthening regulations in the labor market, saying that irregular employment helps lower the unemployment rate by widening job opportunities for women and aged people. Yet, the unemployment figures appear to weaken its position.

The report also says that the percentage of workers whose annual income is less than ¥3 million increased from 43.6 percent in 1997 to 50.2 percent in 2007. It says only that economic recovery is the best measure to reduce economic gaps. It should have shown a clearer path toward sustainable economic recovery.