Jobs drought hits young Japan

Joblessness is not just an adult problem in Japan any more

Japan's depressed economy is leaving more young people without work than at any time in half a century, new figures show.

More than one in eight of Japanese 15-24 year olds are unemployed, the government said on Friday - the worst since records began at the end of the post-war US occupation in 1953.

Overall, the jobless rate in March was 5.4%, not far off the all-time high, as the economy at large remained mired in gloom.

Consumer prices, down 0.6% in March, have been falling for four straight years, hurting business investment and discouraging consumers from spending.

After the boom

Japan's slide into becoming a high-unemployment nation presents a stark contrast from its high-flying 1980s reputation as the home of "jobs for life".

During the boom years, when property prices soared and stock market gains seemed never-ending, big Japanese corporations held onto their tradition of avoiding firing workers wherever possible.

But all that changed once the bubble burst in 1989, as all the shares and property underwriting loans extended by friendly banks suddenly lost their value.

The credit crunch that followed hammered Japan Inc's profitability, helping trigger deflation and four recessions in a decade.

Walking out

The surge in youth unemployment is one symptom of that, observers said, as well as further evidence that the nascent rally has stalled.

"The data reflects the recent slowdown in the economic recovery, on top of which we had uncertainties over conflict in Iraq," said Mamoru Yamazaki, chief economist at Barclays Capital in Tokyo.

The situation is worse for young males than for females. While 13.2% of all 15-24 year olds are officially out of work, the figure for men is 14.6%.

Men in the next age bracket up, 25-34 year olds, are also facing record unemployment of 6.8%.

According to Michio Matsumura from the Labour Force Statistics Office, young people have been clinging to jobs they disliked because of fears about unemployment.

But the final weeks of the financial year, which in Japan ends on 31 March, had seen many finally walk out.

"The labour situation remains severe," he told reporters.