A Wobbly Japan Puts On Training Wheels

After 73 films, revered director Yoji Yamada has proved his genius for mirroring the mind of Japanese society. So it’s a sign of the times that Yamada’s latest movie opens with his hero and heroine getting fired.

The rest of the film is set in an adult vocational school, where the characters find romance and personal redemption while plumbing the mysteries of boiler operation.

Alas, the movie isn’t all fiction. The characters are based on the true stories of people Yamada met at a public course to retrain middle-aged unemployed workers to be janitors.

And it’s no coincidence that Yamada set his film in retraining school. With Japan’s jobless rate at a postwar record of 4.8%--higher than the United States and expected to climb still further--unemployed, underemployed and just plain jittery workers are pouring into the schools.

Meanwhile, the government, unable and for the first time unwilling to prevent mass layoffs, is planning on Friday to approve a major expansion of taxpayer-funded job retraining programs.

The rush to gain skills and credentials to shore up one’s position in a shaky job market looks much like what happened in the United States in the 1980s, when big business shed a fat layer of middle management.

But in Japan, the fear and loathing are incalculably worse. Just 10 years ago, Japan’s vaunted lifetime employment system was the envy of the West. Now, corporate bankruptcies are setting records, and international brand names such as Sony, Hitachi, Mitsubishi and NEC are downsizing by the thousands. And even Tokyo University graduates, whose future was once considered gold-plated, have found themselves pounding the pavement.

All this spells the shocking death of what was a central tenet of the postwar Japanese social contract: Support the ruling Liberal Democratic Party, the LDP--and allow big business to be given priority above all other sectors of society--and expect security, predictability and lifelong employment in return.

Unsustainable Deal

Nine years into a daunting economic slump, the LDP appears to have recognized that the old deal is unsustainable.

Instead, Prime Minister Keizo Obuchi is turning to re-education and retraining of unemployed workers as the best hope for Japan Inc. The government is planning ambitious job retraining schemes that add up to a giant--and very costly--national “get smart” program.

Already, up to 530,000 people will be retrained at public expense in the coming year alone, at a cost of up to $52 million. Obuchi is proposing to beef up retraining even more--and to give the subsidies not to corporations to conduct in-house training but to individuals who want to attend private schools to improve their job prospects.

“It’s not on-the-job training, it’s off-the-job training now,” said Keio University economist Yoshio Higuchi. “The new watchword is personal responsibility.”

Details are expected in a “competitiveness package” that Obuchi’s Cabinet is expected to approve Friday. According to press reports, the bills will make it easier for companies to jettison excess workers but also extend unemployment benefits to those who enroll in retraining programs. The LDP is also floating proposals, still to be fleshed out, to create up to a million new jobs, some by paying local governments to hire unemployed workers for temporary projects.

Some still question whether Japan’s leaders have fully grasped the harsh realities of the global marketplace, but Japanese workers are bracing for their new world.

A recent poll by the Yomiuri, Japan’s largest newspaper, found that 76% are “quite worried” or “very worried” about their jobs. For many employees, the only answer is to get skills--and fast.

Vocational schools report that workers are even paying their own way if profit-light corporations cut back on educational benefits.

It’s a trend evident at every rung on the economic ladder: twentysomethings dumping dead-end office jobs to learn digital animation; 30ish managers going to night school to learn Western-style accounting; and men in their 50s and 60s studying how to become entrepreneurs. Some who send their children to cram school are themselves cramming at career school at night.

Men older than 50 have been those worst hit by downsizing. Because they have been promoted by seniority rather than merit, these aging corporate samurai are seen as the most expensive and least productive members of the erstwhile corporate family.

“Eighty percent of us feel we are being overpaid,” said a 52-year-old executive at a prestigious blue-chip firm that is now producing red ink and pink slips.

Worried about his future, the man enrolled in the Golden Age Cram School for Entrepreneurs, a free course set up by a self-made tycoon. In a ballroom full of gray heads, whom should he meet but an old colleague from the same company, also attending the Saturday lectures surreptitiously.

‘Valueless at 50’

Film director Yamada said he made his retraining-school film, titled “School III,” in part to protest what is happening to Japan’s traditional virtues.

“People’s value is now judged purely on their usefulness to the economy and production, and so they are seen as valueless at 50,” the director said. “This kind of age discrimination would be illegal in America, wouldn’t it? But it’s routine here.”

Economists say it will get worse. Some predict that unemployment will peak at 6% to 8%, but others fear that it could hit double digits before the aging population begins to shrink the labor force in 2005. By some estimates, bloated industries such as banking and construction will need to dump up to 30% of their work force to stay afloat.

For years, the government has kept unemployment down by a complex tangle of subsidies--37, at last count--that paid companies in declining industries to retain and retrain their excess workers instead of firing them. This corporate welfare costs $9 billion a year and is seen by many economists as a hideously inefficient form of interventionism. Moreover, the company-specific skills the workers learn are often useless to any other employer, critics say.

Last month, the Labor Ministry for the first time pledged to review the subsidy system, but opposition to scrapping it remains strong. Ministry spokesman Hajime Shiraishi had earlier said Japan has no alternative to subsidies until it develops growth industries that could absorb the millions of workers who will be sacked.

Moreover, Shiraishi said, the unemployed here face far more hurdles than those in the U.S. Joblessness is still a stigma. There is little tradition of labor mobility. Companies still dislike hiring mid-career employees, preferring to take on fresh college graduates and train them in skills that often have no value to any other employer.

The compromise that is emerging is for Japan to keep some subsidies going--but shift them to the individual. For the first time, workers will be able to decide for themselves what skills might be needed in the job market, and to study at private schools at government expense.

Already, Japan has vastly expanded programs that give mostly middle-aged unemployed workers up-to-the-minute training in accounting, computers, information technology and other survival skills for the international economy. Up to 200,000 students can enroll this year, according to the Labor Ministry.

More radical--for Japan--is a program that began in December and allows people who still have jobs to enroll in private vocational schools and receive up to $1,670 in tuition rebates upon completion of a ministry-approved course.

“It’s the biggest revolution since World War II,” said Masaya Kinoshita, editor in chief of a 3-year-old magazine called Career Schoolroom. “They should have done this long ago.”

Others are less enthused. “It’s a better way of wasting money compared with the old type of subsidies,” said Naohiro Yashiro, a professor of economics at Sophia University who advocates deregulation to spur job creation.

Despite widespread doubts about whether there will be jobs for all of those who emerge from retraining programs--some of which cost up to $12,500 a student--demand for the education is soaring.

Career Schoolroom has a circulation of 120,000 and caters solely to people who want to acquire new skills to “increase their personal market value,” Kinoshita said. That American-sounding expression is in vogue here of late, competing with, if not supplanting, old Japanese platitudes about company loyalty and self-sacrifice for the glory of the corporate group.

Kinoshita said his 30ish readers--half of whom are women who were never guaranteed lifetime employment to begin with--don’t expect their employers to look after them. “They can only trust themselves now, so the question becomes how to increase their value,” Kinoshita said.

One of the most popular programs prepares Japanese to take the American licensing exam for certified public accountants. Two private vocational schools that offer the courses say enrollment has jumped up to 50% in the past year, because demand for CPAs is expected to be huge as Japan begins switching over to international accounting standards.

Competition is fierce to enter another red-hot vocational school called Digital Hollywood, which offers courses in Internet and multimedia computer skills, and has a branch in Santa Monica. Most of the students are in their 20s and aspire to be game designers.

At the bottom of the economic heap are the public vocational schools, which are so jammed with job seekers that in Tokyo, only 47% of applicants are admitted, city officials said.

But retraining may be the only hope for blue-collar unemployed like Akiko Yamamura. A 33-year-old high school graduate who lost her clerical job in December, she lives in Ota ward, one of the old neighborhoods in Tokyo’s wounded industrial heartland.

Just as her 90-day unemployment benefits were about to run out, Yamamura flunked the entrance exam for a free, city-funded course in accounting. The course drew 150 applicants for just 15 seats.

In a display of gaman, the gritty endurance that Japanese prize so highly, Yamamura went back to take another exam for a less popular course in industrial drafting. This time, there were only 14 adults vying for eight slots.

The good news: Yamamura passed, and her $1,183 monthly unemployment checks will keep coming until she completes the six-month retraining course.

The bad news: There may not be a job for her when she graduates. Of the 23 students who finished the program in March, only 13 have found work.

This is terrifying news for Kunio Numata, a 50-year-old victim of risutora--the new Japanese term for restructuring--at a building maintenance company. Numata has just completed a one-year course in metal molding--at a cost to taxpayers of $12,500--but has yet to find a job.

“I’m too ashamed to tell my neighbors or relatives that I’m going to school,” Numata said. “I don’t think any regular person could say so out loud. I will do my best to find a job.”

*

Researcher Chiaki Kitada in The Times’ Tokyo Bureau contributed to this report.