Japan's unemployment rate climbed to an all-time high of 5.7 percent for July, 0.3 percentage point higher than for June and topping the former record high of 5.5 percent in April 2003. The fact that Japan's unemployment rate remains the lowest among the Group of Seven industrialized countries is small comfort.

It is estimated that there are up to 6.07 million surplus workers for all industries, slightly less than 10 percent of the nation's employed workforce. If companies become unable to keep these workers on the payroll, the unemployment rate will shoot up further. The new administration faces a difficult task.

The Aso government takes the position that the economy has hit bottom. But the unemployment rate has worsened for six straight months. In July, the unemployment rate for men rose to 6.1 percent, 0.4 percentage point higher than in June and topping 6 percent for the first time. The corresponding figure for women was 5.1 percent, 0.1 percentage point higher than in June.

The ratio of job openings to job applicants for July fell to an all-time low of 0.42 for the 14th straight monthly decline. July also saw the number of unemployed people jump by 1.03 million from a year earlier to 3.59 million — marking the largest-ever increase. Of the total, 1.21 million workers had been laid off, 650,000 more than a year earlier.

The situation for workers is becoming polarized. While the number of workers employed by large companies (at least 500 employees) increased 0.4 percent in July from the same month the previous year, the numbers at small companies (one to 29 employees) and at midsized firms (30 to 499 employees) declined 1.4 percent and 2.8 percent, respectively.

Declining demand for full-time workers is worrisome. Full-time job offers in manufacturing have halved in the past year, while offers for part-time and seasonal employment have risen. Government, businesses and labor unions are urged to cooperate in efforts to increase the number of job offers, especially for full-timers. It is essential to identify areas where a service is in strong demand and labor is in short supply.