Japan's Jobless Rate At Record High
Japan's unemployment rate hit a record-high 5 percent in July, the government said Tuesday, amid a drawn-out economic slowdown that is spurring a spate of job cuts and bankruptcies.
Japan's jobless rate has never hit the 5-percent level since the government began compiling such statistics in 1953.
The global downturn in demand for electronics and other technology products has prompted job cuts as production stalls and exports shrink. Rising bankruptcies and weakness in the construction industry have also hurt jobs.
In June, the jobless rate was at the previous record high of 4.9 percent and the number of unemployed rose for the third straight month to 3.38 million.
As CBS News Correspondent Barry Petersen reports, experts say Japan can't be counted on to pull America out of its financial doldrums.
"America's not going to be able to get help from Japan," said Noriko Hama, Mitsubishi Research Institute. But, he adds, "the Japanese are very much hoping that the United States will help them."
The mounting job losses have Japanese consumers spooked.
In America people are still buying, but in Japan it's the opposite. Japanese have billions tucked away in savings accounts, but they are afraid the economy won't improve, and so retail sales have been sliding.
Prime Minister Junichiro Koizumi is trying to carry out economic reforms that he says will also bring about "pain" reflected partly in rising unemployment.
Past administrations have relied on public-works spending to jump-start the economy. But Koizumi is backing more basic changes such as privatizing the public sector and encouraging new, more profitable businesses.
For decades, Japan has boasted relatively low unemployment rates.
Some say the layoffs are long overdue, that Japan's industries remained loyal to a bloated work force while business sagged and the red ink gushed.
The Ministry of Public Management said that the number of jobless jumped by 230,000 last month from a year earlier to 3.3 million.
Recently, even the top companies that have customarily offered lifetime employment are announcing job cuts.
The global electronics downturn is crimping exports and dealing a blow to Japanese electronics companies such as Toshiba Corp., Fujitsu, NEC Corp. and Matsushita Electric Industrial Co., which have all announced job cuts recently.
© MMI, CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report