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Asia Insight

Japan's Abe faces cold reality in rush to save 'ice age' workers

Last-ditch plan seeks 300,000 jobs for middle-aged 'lost generation'

AKANE OKUTSU, Nikkei staff writer | Japan

TOKYO/KOBE, Japan -- At a public employment office in Japan's southwestern city of Kobe, about 20 job seekers over the age of 35 were looking for another shot at a career. For some, it might be their last shot.

"I was desperate," said a 37-year-old man listening to presentations from company recruiters on the final day of a two-week training program -- part of an ambitious government push to increase permanent employment for middle-aged job seekers.

The man had graduated from university right after the global financial crisis of the late 2000s. Unable to land a regular position with a company, he reluctantly worked a night job before quitting due to worsening health and a difficult relationship with his boss. "I cannot live a decent life if I don't change," he said.

The man and other participants in the program belong to the "lost generation." Typically in their mid-30s and 40s, they graduated from college after the economic bubble collapsed in the 1990s. They were cast out into a frigid job market -- an "employment ice age," Japan now calls it.

As of 2018, more than 30% of the population between the ages of 35 and 44 were either not in the workforce or were nonregular workers, Cabinet Office data shows. The nonregulars are stuck with temporary or part-time positions in a country once known for lifetime employment, and where companies still prefer to hire graduating students en masse rather than looking for midcareer talent.

Even more worrying for the government is that many members of the ice age generation are supported by aging parents. This, coupled with an acute labor shortage, has prompted Prime Minister Shinzo Abe to get serious about bringing more citizens in from the cold.

Before last summer's upper house election, the Abe government announced a three-year goal to increase employment and earnings for the lost generation. It plans to spend more than 65 billion yen ($600 million) over the three years to support this segment of the population specifically.

The "employment ice age support program" aims to find 300,000 permanent positions for people between the ages of 35 and 44. Other goals include boosting the incomes of nonregular workers and reaching out to the nation's hundreds of thousands of shut-ins to help them blend into society.

Yusuke Shimoda, a senior economist at the Japan Research Institute, thinks the new plan improves on previous efforts to help the generation because it is broader. It "covers wider support, from welfare to job hunting," he said.

Starting this year, the government will offer subsidies to encourage companies to hire and train more people, and to spur educational institutions to offer special training programs. Funds will also go toward support services for people who are neither employed nor looking for jobs.

The central government wants local governments to hire more themselves, and to come up with their own solutions. The Ministry of Health, Labor and Welfare has also started recruiting.

As of 2018, more than 30% of Japanese in the 35-45 age range were either not in the labor force or were stuck in nonregular jobs, according to the Cabinet Office.   © Reuters

Now is as good a time to act as any, given the high ratio of job openings to applicants -- over 1.5.

As older members of the lost generation enter their late 40s, this can also be considered the "last chance," said Yuji Genda, a professor of labor economics at the University of Tokyo's Institute of Social Science.

Leaving it to parents to support their sons and daughters is simply not sustainable. The parents of the lost generation are entering their 70s. If their offspring fall into poverty, it will further strain a social security system already hit by the aging and shrinking population.

By 2040, the social security burden on every working-age individual is expected to more than double to 3.54 million yen, according to the JRI. The institute's Shimoda warned the burden "would grow very fast" and weigh on the national and local governments alike.

Helping the shut-ins, meanwhile, only becomes more difficult the longer they remain detached from society. Approximately 613,000 Japanese aged 40 to 64 live as recluses, isolated at home for at least six months with no work or school, a government survey revealed last year.

While the three-year initiative will get up and running in 2020, some on-the-ground players like the Kobe public employment office have a head start.

The Kobe office set up special teams to engage with the ice-agers and urged employers to offer positions specifically to the age group. The two-week training session offered tips on communication and other aspects of work, and on the last day, companies were invited to come and get acquainted with the job seekers.

Kazuaki Suginaga, president of construction company Nagatsuka-Tekkou, said he is eager to hire more workers over 35. "The particular age group is missing from our team," he said. The company could use employees who would bridge the gap between fresh young recruits and veterans in their 50s and 60s, he suggested.

In light of the labor shortage, Suginaga said he is even willing to train applicants who have no relevant skills.

A 38-year-old attendee who gave only his last name, Okubo, said opportunities are few and far between for someone at his age and with his limited skills. "This was a chance," he said of the program.

Taking a cue from the government, human resources company Pasona announced it will employ 300 ice age workers in three years. It plans to assign them to rural projects, in graying areas that have suffered from an exodus of young people to the cities.

Pasona says regional revitalization is a fairly new field that could allow excluded individuals to become pioneers -- rather than trying to "catch up" with their more established peers.

Kinuko Yamamoto, Pasona Group's vice president, said the company plans to train new employees in information technology, foreign languages and farming. "The training will cover the business of agriculture, such as how to process and market the products," she said. She stressed middle-aged workers have a lot of life experience that could benefit rural projects, and expressed hope that they will play leadership roles.

Sankyu, a logistics and plant engineering company, started opening up positions for the age group in October. It had hired nine for its branches as of mid-December.

Every year, it aims to hire 1,300 new employees but usually ends up with about 1,000. Plus, with few midcareer workers, "generational changes for [leadership] positions are difficult," said Katsumi Aoyama, general manager of Sankyu's human resources department. The lost generation could be an answer, but recruiting them is not always simple.

Job seekers over the age of 35 speak with company recruiters in Kobe. (Photo by Akane Okutsu)

Sankyu's job openings do not require specific skills, but "unlike what we had expected, there are not many applications from people who have long been unemployed or been in unstable jobs," Aoyama said.

This raises the question of how to ensure that opportunities go to the people who need them the most.

Other companies have qualms about hiring ice age workers after employing them on contracts in the past, only to see them leave quickly, according to Yoshihiro Tanioka of the labor authority in Hyogo Prefecture, where Kobe is located.

At another employment support office in Omiya, a suburb north of Tokyo, most jobs listed for the target age group are for driving taxis. "More needs to be done to raise awareness among companies" that recruiting from the lost generation is an option, said Takeshi Hata at Hello Work Plaza Omiya.

Abe's drive to rescue such workers is part of a much broader attempt to shore up the shrinking workforce by opening doors for women, seniors and immigrants. But the University of Tokyo's Genda said the hurdles are high and will "require bold measures" to clear, after a generation was left to languish for more than a decade.

While ice-agers may share common difficulties, Genda noted that every individual faces unique obstacles. Helping them will require a human touch and some trial and error, he said, adding that the government's financial backing could nudge the process along.

The "desperate" 37-year-old former night shift worker in Kobe was just grateful for a glimmer of hope.

"I'm thankful that companies are looking for people our age," he said, "and that the government cares about us."

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