The latest jobless figure is up from 4.6 per cent in May and is above the previous peak of 4.8 per cent established in March and April. Among men, the unemployment rate is a new record of 5.1 per cent, and for women it is 4.4 per cent. The hardest hit were men in the age brackets 25-34 and 55-64. They recorded rates of 5.4 per cent and 7.2 per cent respectively.

These figures may appear low in comparison with many other countries. In Japan, however, official statistics vastly underestimate the actual level of unemployment: anyone who works more than one hour in the last week of a month is regarded as having a job. Some commentators say that the actual level of joblessness in Japan is closer to twicethe official rate.The statistics also point to a breakdown of the `lifelong employment system' under which many employees, particularly in larger corporations, were guaranteed a job, steady promotion and other benefits. In June, the number of workers who were forced to leave their jobs due to company bankruptcies or restructuring hit a new high of 1.18 million--up from 1.15 million in April.

After the spectacular collapse of the stock and property boom at the end of the 1980s and nearly a decade of low or negative growth rates, many corporations are being compelled by low profits to undermine the lifelong employment schemes. An article in last weekend's Sunday Times entitled "Japanese firms rewrite rules of employment' noted: `The methods used to get workers to leave the company of their own accord often border on harassment. Unwanted employees are deprived of job title, desk and dignity--Japan's docile `house unions' accept such abuses."

A government-sponsored fast-track deregulation committee setup in January to oversee the economic reforms announced last week that promoting `labour flexibility' would be one of its main focuses this year. The committee of 14 academics and corporate representatives is charged with making restructuring recommendations to the government of Prime Minister Keizo Obuchi, based on requests made by business groups and foreign governments. Japan has been under considerable pressure, particularly from the US, to remove existing trade and foreign investment barriers.

Social tensions, stress and suicide

Rising unemployment and job insecurity are creating sharp social tensions. Many middle-aged people are suddenly finding themselves out of work in a country with very little in the way of unemployment benefits, and without the prospect of finding a new job. For those in work, average wages are also on the decline--the latest statistics showed a year-on-year fall of 4.4 per cent, as well as a 9.3 per cent, drop in bonus payments as companies sought to cut costs.

Asurvey by the Yomiuri Shimbun newspaper in mid-July revealed that 69 per cent of people felt under stress recently, always or occasionally--up 7 per cent from a similar poll in August 1996. Of those who experienced stress, 59 per cent said it was related to work, citing heavy workloads, fatigue, concern over the future of the company or work responsibilities. Other people said they were affected by uncertainties over their future or finding a purpose in life; their health or that of their family; the raising and education of their children; and housing.

The growing social pressures are expressed in the latest police figures. They reveal that 32,863 people committed suicide in Japan during 1998. This is both the largest number and the highest rate since records began in 1947. Many older men who lose their jobs are unable to find new employment. A recent labour ministry survey of 13,000 businesses with more than five employees found that only 34 per cent were planning to hire new employees over the next threeyears. Perhaps the most shocking statistic is the 53 per cent increase in suicides in 1998 among children and teenagers aged between 10 and 19. The figure reveals a profound alienation among young people. Uncertainty about their own future, social and economic pressures on families, as well as broader concerns about the state of the world are undoubtedly factors in producing intense frustrations and depression.Another insight into the turmoil among children and teenagers was provided by an article in AsiaWeek in April entitled "Chaos in the Classroom: What has got into Japanese school children?" It dealt with a new phenomenon in Japanese schools known as gakkyu hokai, or classroom collapse.

Little is offered in the way of explanation. The most perceptive remarks are made by Ryu Miri, the author of a book about a Kobe teenager who sent shockwaves through Japan two years ago when he decapitated a fellow student and left his head outside a local school. The article notes: "The problem, Ryu feels, is a societythat does not value children as they are. Instead, acceptance and approval are too often based on good grades. But there are only so many prodigies, What about the rest?"

Further economic restructuring demanded

Rising unemployment and greater job insecurity, compounded by a lack of welfare and other public services such as health care and housing, create substantial pressures on individuals and families, which find their reflections among young people. The economic stagnation that has afflicted Japan throughout the 1990s has undoubtedly had a profound social and political impact--the rising suicide rates are one of the sharper indications of a broader social malaise.

As in other countries, the Japanese government has no solution to these problems. Under considerable pressure from the US and the major European powers, it is moving towards further restructuring, particularly of the heavily indebted banking and financial sectors. This includes the removal of barriers to foreign competitors, both ingoods and services, an end to the life-long employment system, and the abolition of subsidies for services to rural areas. Such measures will only intensify the social breakup.

A special report entitled `Empty Isles Are Signs Japan's Sun Might Dim' in the New York Times last weekend pinpoints those aspects of the Japanese economy regarded, in the US in particular, as obstacles to more dynamic investment and profit making. In a tone bordering on disbelief, if not derision, the article describes in detail the services provided to the small island of Akashima, in southern Japan, with its population of just four people: a $2.5 million project to build a new pier, a $490,000 subsidy for a ferry service, and undersea cables for a guaranteed electricity supply.

For the author Nicholas Kristof -- and no doubt he speaks for much of the US establishment -- Akashima epitomises what has to go in Japan. In order to cut the costs of electricity, telephones, postal services and transport for big businesses,subsidies to rural areas--a crucial base of support for the ruling Liberal Democratic Party--have to be abolished.

"Japan's Total Factor Productivity, the broadest measure, is now growing by only about half of 1 per cent per year, much less than half the level of the United States. Fundamentally, the reason is that Japan steadily lost its capacity for what the economist Joseph Schumpeter called `creative destruction". Japan never built up a huge public welfare system, but it has instituted safety nets and subsidies to create a welfare state for companies and towns and declining industries."

The conclusion to be drawn from Kristof's article is obvious: just as `welfare dependency' is rapidly being abolished for individuals in the US, Britain, Australia and elsewhere, so it must be ended for the towns, villages and islands of rural Japan, as well as for the country's `declining industries'.

The advocacy of a far reaching restructuring to boost productivity and profits is completely in line with therequirements of US and European capital, keen to exploit opportunities in the Japanese economy. For millions of people in Japan, the results will nothing short of a catastrophe as industries and services are shut down, lifelong employment ended and the millions of `excess' workers are shown the door.

Excerpted with permission from WSWS