Japan’s One-shot Deal: Permanent Employee or Precariat

In its special report on Japan issued on November 20th, The Economist prudently prescribed Japan’s condition as going “Into the unknown.”

Japan is growing old. It is also getting weaker, both in relative and absolute terms. Japan’s population, which peaked in 2005, currently stands at 127 million. This number is expected to dwindle to around 90 million in 2050, one-fourth of which will be above 65 years of age. This precipitous population freefall will be so remarkable, so fast, and so devastating that The Economist called it a “demographic vortex.”

So much for bright times ahead.

More worryingly, Japan’s youth will not only shoulder a burgeoning financial deficit, but will also find themselves increasingly unable to find a decent job with which to pay off Japan’s swelling government debt. According to University of California Professor Robert Reich—who coined the term “New Economy”—only about 10-20% of today’s youth will manage to land high-paying white-collar jobs. The rest of the younger demographic will be underemployed, most likely as members of the service industry who are taught from manuals.

A less convoluted description that’s easier to picture would be “someone who’s flipping burgers when he could potentially be helping people file tax bills.”

Of course, people who work at fast food joints are satisfying societal demand for on-the-go food, and in this regard their work is by all means a socially noble cause (as textbooks economics is quick to point out). But let’s admit it, it’s not the most creative job in the world, and it’s definitely not something you should do for 40 years—and certainly not something you want your kids to be doing all their life, either.

Although over 40% of Japanese youth today will come out of the nation’s schooling system with a newly-minted B.A., as has been stated earlier, decent “permanent employee” positions in white-collar jobs will only be comprised of roughly 10-20% of the labor force. Simple math reveals the rude awakening—less than half of college grads will garner such sought-after jobs.

Doom literally awaits the rest, at least in today’s Japanese employment system. As The Economist’s special report points out, Japan is “a ‘one-shot society:’ those who fail to get a good job upon graduation can be frozen out for life.” The increasing number of well-educated youth who aren’t one of the lucky ones are usually “stuck”—they wander from one part-time to another as “irregular workers,” who are “easy to hire and easy to fire.” Without the OJT (On the Job Training) that their “permanent employee” counterparts enjoy, those who couldn’t find a full-time job upon graduation will be unable to polish their skill-sets for the rest of their lives (unless, by some stroke of luck, they do manage to land a “permanent position”—which is, needless to say, an increasing rarity).

Masahiro Yamada, the pop-sociologist (perhaps comparable to Malcolm Gladwell in terms of readability, minus the literary flair of Gladwell’s New Yorker prose) who coined the term kakusa-shakai (an unequal society), calls such youth unable to secure a full-time job Japan’s new “precariats.” The term is a play on the word “proletarian” and “precarious,” signifying both the low expected lifetime earnings and high amount of social risk that such people are exposed to.

The window of opportunity to become a “permanent employee” is closing fast, and Japan’s “precariats” will become a huge problem a half-century from now when they age—since most of them defer the 15,000yen monthly pension insurance, they will not be benefactors of the state-sponsored pension system.

Today, Japan’s baby-boomers are aging and retiring, causing the tired, jaded, and overworked labor force of 66 million to live with less benefits for themselves when they age. In 50 years not only will the benefits be less, but many of today’s youth will be ineligible to receive them.

Turbulent times lie ahead, as Japan plunges deeper and deeper into the unknown.

//By Ryo TAKAHASHI

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