Grads Face Zero Japan*
[Need for 24in4--RSB]

Page One Feature

Once Prized by Firms, Japan's Grads

Are Now Settling for Dead-End Jobs

By YUMIKO ONO

Staff Reporter of THE WALL STREET JOURNAL

TOKYO -- Ryo Sugo graduated from high school in March 1999 with scant prospects of landing full-time work. So he took a part-time gig at the local Ministop Co. convenience store, figuring he'd soon find something better.

Two and a half years later, Mr. Sugo still dons his navy-blue Ministop uniform to man the cash register, pulling six graveyard shifts a week. Far from getting ahead, the 20-year-old has competed for several full-time positions but was shot down each time. In one interview for a sales job, the hiring manager literally tossed Mr. Sugo's resume back in the young man's face and scoffed: "We don't want someone with a part-time attitude here."

"It was shocking. They think part-timers are just playing around," sighs the soft-spoken Mr. Sugo, blinking in the morning sun after a shift. He worries that his life is going nowhere. Finding a wife, he says, is "out of the question" if he stays stuck in this job, which pays 1,000 yen an hour ($7.90) and no benefits in Tokyo, one of the world's most expensive cities.

"If I'm still a part-timer when I'm 25, I'm in big trouble," says Mr. Sugo, nervously puffing a cigarette.

The future has never looked so grim for young Japanese with a high-school education. High-school grads long were cherished by employers as "golden eggs" full of potential. Secure jobs in factories and offices paid so well that they guaranteed a middle-class lifestyle for millions whose parents had been farmers or laborers.

This social contract was part of the all-boats-rising era of steady growth that for four decades made Japan the world's second-largest economy. Today the era of the golden egg is over. Japan's decadelong slump not only has created bad loans and falling prices but also is reshaping the very fabric of society. On the surface, Japan has fought to avoid picking winners and losers in its great shake-out, going to great lengths to minimize layoffs. But quietly, without giving it much thought, the nation already has made that tough choice.

While companies are trying to keep their longtime employees to honor Japan's tradition of careerlong jobs, they feel free to slash openings for fresh high-school grads. Nissan Motor Co. hired 2,500 in 1991 but hasn't hired a single one in the past five years. The Federation of Employers' Associations, a business lobby, last year surveyed 550 member companies in Tokyo and found that half have stopped hiring new high-school graduates, in part because college graduates are grabbing jobs once earmarked for high-schoolers.

Instead of battling for scarce full-time positions, many young people are drifting from one part-time job to another in today's only growth industries: flipping burgers, delivering pizzas, selling soda in convenience stores. The media have dubbed these serial part-timers "freeters" -- a Japanese neologism combining the English word free and Arbeiter, the German word for worker. It means anyone who chooses to make a living by juggling part-time work.

Like Mr. Sugo -- who logs 48 hours a week at Ministop -- many part-timers actually work as long and hard as full-timers, but they usually are paid by the hour and get no benefits. A flood of articles and documentaries has glamorized the freeter's flexible lifestyle and iconoclastic, antisalaryman attitude. In reality, many freeters are more a product of hopelessness. Japan's unemployment rate in October reached a record 5.4%; the figure for men aged 15 to 24 was 10.7%. What's more, part-timers now make up 23% of the work force, up from 17.3% in 1995, according to government data.

This sea change in Japan's work force is part of a world-wide trend, as companies seek more efficiency. The U.S. has long been adding temporary and part-time workers to its work force, allowing companies to hire and fire more nimbly. Europe is now moving in the same direction. Economists say the trend represents healthy progress for an economy, because a flexible labor market makes it easier for Japan to shift workers into growth industries and out of dying ones, and for firms to spruce up their performance.

And yet a number of sociologists warn that Japan is thrusting too much of the pain of this sweeping economic workout upon the youngest in the labor force without thinking about the consequences. Students who get trapped in low-paid part-time jobs risk entering a new permanent underclass. That would betray the core ideal of modern Japan, an egalitarian land where janitors and factory workers can think of themselves as middle class.

"Part-timers are the ones that will be forming the lower tier of a class society," says Hiroaki Mimizuka, a professor of Ochanomizu University specializing in education.

Such a society is already evident in Adachi Ward, a slumping industrial district of ramshackle little factories and concrete public-housing towers in northern Tokyo. Ryo Sugo grew up here in one of those projects and attended Adachi Shinden High School, a bottom-tier public school built on the site of a former cellophane factory.

Adachi Shinden is a world away from the image of diligence and order popularly associated with Japanese schools. Few students here spend their evenings cramming to study for Japan's difficult college-entrance exams. A student with spiked hair napped in the hallway during exam week this summer, while a group of girls giggled loudly over comic books in the library.

But through the 1980s, when times were good, even Adachi Shinden was able to place 36% of its students in full-time jobs upon graduation. In March 2001, only 14% of fresh graduates got full-time jobs, even though Japan's youth population is falling. The school estimates that half of this year's graduates became part-timers, up from a quarter in 1992.

On a recent morning, Ayaka Sato, an 18-year-old senior, walked into Principal Takahiro Suzuki's office and insisted it was useless to go on any job interviews, because she knew she'd be rejected.

"I'm going to make it to graduation, so isn't that good enough?" pleaded Ms. Sato, clasping her pink cellphone.

"Come on, everyone graduates. That's not good enough," countered Mr. Suzuki. "No one has done well by being a freeter. That's the truth."

Mr. Suzuki, an energetic 57-year-old who was named to his post in 1997 after years of running other low-tier schools, is battling to even the odds his students face. To boost morale, he repainted the graffiti-covered hallways all by himself. To keep students in school, he is offering unorthodox classes such as composing karaoke songs on the computer. He recently launched a "Movement to Eradicate Freeter-ism," gathering students several times a year to lecture them on the pitfalls of part-time work.

"They're just going to be used by companies, then discarded," declares Mr. Suzuki. "When they're 30 years old and still hanging around, which company will want to hire them?"

But Mr. Suzuki is fighting an overwhelming economic force. Adachi Ward's small leather factories, metal-processing plants and construction companies are going under or slashing costs. The local employment office is sending fewer and fewer full-time-job leads for his students.

Things were very different for Ryo Sugo's father, Kimio Sugo, 48, when he graduated from a technical high school near Adachi 30 years ago. Like his son, the senior Mr. Sugo says he didn't know what he wanted to do after leaving high school. He first went on to a vocational school specializing in computers but quickly dropped out. For three years, he worked part time as a cook in a grilled-chicken restaurant.

But the economy was expanding, and companies faced a labor shortage. Mr. Sugo says he had no trouble getting a full-time job at an insurance company, then changing jobs again before settling down. For 23 years, he has worked as a route salesman for a vending-machine company, refilling the machines with coffee and other drinks. His pay has risen steadily under the seniority system, to about five million yen, or about $40,000, this year.

Contrast that with Ryo Sugo's outlook. About 40% of the students in his Class of 1999 dropped out before graduating, and only three of 146 graduates went to college. Mr. Sugo says he hated studying and found it difficult to get serious about job hunting. His friends were either getting rejected at job interviews or had already dropped out of school. "I just didn't want to think about the future," he says.

Japan's burgeoning part-time market, meanwhile, looked much more welcoming. Convenience stores and fast-food outlets in his neighborhood constantly had signs seeking hourly workers -- in part because of high turnover. Now that more companies are replacing full-time employees with lower-paid part-timers, help-wanted magazines are bursting with part-time job ads, ranging from waiters to computer programmers.

Upon graduation, Mr. Sugo promptly found such a job at a Ministop convenience store near his housing development, where he lives with his parents. It seemed a good deal at first. By working at night, six days a week, he managed to earn about 180,000 yen ($1,430) a month -- more than the average starting full-time salary of about 160,000 yen ($1,270) a month for high-school graduates.

It was a fateful move. Hiroshi Nagamine, who graduated from Adachi Shinden two years ago along with Mr. Sugo, says he nearly wound up as a freeter himself. He stopped looking for full-time work after failing interviews at an auto-parts distributor and a canned-tea maker. The rejections were all the more depressing because those jobs paid no more than a part-time job he once held at a noodle shop. But right before graduation, he found full-time work through a help-wanted ad, with a company that transports heavy equipment.

In the past two years, the 21-year-old Mr. Nagamine has been given more responsibility and has earned a license to operate a crane -- a valuable skill if he were to seek another job. He pulls in a comfortable monthly salary of 300,000 yen ($2,500), rents an apartment and has taken out a loan to buy a used Nissan Cedric, an upscale sedan. Mr. Nagamine says it is extremely tough these days to get a job if you don't have certifiable skills, and he worries that his friend Ryo is blowing his future by remaining at the Ministop store.

"He's going to pay for it later," says the chatty Mr. Nagamine, shaking his head. "If you work in a convenience store until you're 30, where can you go from there? At most, you can work at a construction site, a scrap yard, or become a taxi driver, and what an awful job that is."

Indeed, Ryo Sugo soon discovered the dark side of being a freeter. The Ministop he first worked at closed down after seven months, leaving him unemployed. He then found a similar job at another Ministop but quit that store in a year, upset that a manager forbade him to wear earrings or shorts. After the botched interview for the sales job and other failed attempts, he is now working at his fourth Ministop, again on the night shift.

Mr. Sugo, who sports dyed-brown hair and a bead necklace, spent much of his free time alone, playing video games on a console he borrowed from a friend. Recently, he had to give the machine back. His work schedule has killed his social life by making it difficult to meet his friends. He sometimes goes to bed just before noon and usually gets up at 9 p.m. to commute to the store by motorcycle. Going out for a drink at night feels weird, he says, because he has just woken up. If he wants to hang out with a friend on an afternoon off, "I'd have to spend the whole day without sleep," he says.

Mr. Sugo has never gotten a raise, and now he wonders whether he'll ever make enough to move out of his parents' apartment and live on his own. What's more, the job on the night shift is deadly dull.

On a recent shift at 3 a.m., the sole customer in the store purchased a pack of Marlboro cigarettes. Mr. Sugo spent a long time doing stretches behind the cash register and gazing at his own reflection in the window. Despite all his experience at Ministop, it's pointless to seek a full-time position with the company: The convenience-store chain hires only college graduates for such jobs, a Ministop spokesman says.

Ryo's father, sitting in a coffee shop near his apartment, wonders whether the days are over when Japanese children could expect to live a better life than their parents. Kimio Sugo's parents quit farming to move to Tokyo, and life improved, his father working in a printing plant and his mother in a restaurant. Kimio's parents were too poor to buy him a bicycle; he has enough money to buy his son a motorcycle. But these days, Kimio Sugo is concerned about his own future, after seeing more and more rival vending-machine operators consolidate recently, leading to job losses.

"Things are going to get worse," says Mr. Sugo, pursing his lips.

Ryo Sugo, meanwhile, says he is planning soon to renew his hunt for a full-time job. But he hasn't gone on any interviews recently. Looking back at the disastrous sales-job interview, he now blames his failure on his casual attire he wasn't wearing a suit. He hopes he'll land a job if he keeps his aims modest. His game plan? Avoid seeking jobs at big companies, for fear they may be too competitive.

"I'm not looking for a high salary or anything," says Mr. Sugo, pursing his lips just like his father does. "All I'm looking for is a so-so job that pays enough for me to survive."

Write to Yumiko Ono at yumiko.ono@wsj.com1

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