Japan's economic slump worsens

TOKYO. Oct 9: The Japanese economic slump has worsened, despite an additional recovery package adopted in mid-Sep tember. Prime Minister Morihiro Hosokawa said yesterday, reports AFP.

“It's worse than a month ago." the Prime Minister said at a budget committee meeting of the House of Councillors, the upper house of parliament.

The Hosokawa administration hammered out pump-priming measures worth 6.2 trillion yen (59 billion dollar) on September 16.

The step followed economic recovery measures worth 10.7 trillion yen adopted by the government In August last year and a similar package of 13.2 trillion yen in April this year.

Finance ministry officials said Wednesday that the Japanese economy remained stagnant In the May-September period with no signs of recovery.

despite recovery package

All major economic research institutes here have revised downward their earlier estimates for the Japanese economic growth for fiscal 1993. ending next March.

The average estimate made by seven organisations, including Nomura Research Institute, for the growth of Japan's fiscal 1993 gross national product (GNP). was revised from 1.9 per cent to 0.3 per cent.

Unemployment at 6.5 of workforce

Another report adds: Unemployment In Japan is currently at 6.5 per cent of the workforce, not the 2.5 per cent previously reported by the government, press reports yesterday quoted an Internal Asahi Bank report as saying.

The report blamed the discrepancy between the government and unofficial figures on corporate "hidden unemplov-

ment. saying Japan had an additional 2.5 million people effectively unemployed while they remained on company payrolls’

The internal report had been leaked to the Japanese press after the bank had refused to release II to the public, although the bank confirmed the tenor of the press reports to AFP.

Because of the tradition of life employment for workers In Japan, companies here often keep employees on the payroll without actual duties rather than lay them off during economic downturns.

The employees — usually over the age of 50 — are often kept on at reduced pay or are shifted off to subsidiaries.

Added to the official figure of 1.6 million unemployed, the extra workers would make up a total four million unemployed in Japan, or 6.5 per cent of the workforce, the bank said.

It criticised the practices leading to the hidden unemployment. citing high costs for companies, and called for changes in Japan's social system.

Although the figure puts Japan's unemployment rate Just below that of the United States, which has a rate of 6.8 per cent, it Is Still far under the rates In Europe, some of which are above 10 per cent.

While collar workers have been particularly hard hit In almost every sector, especially in industry where the number of employed fell for the first time during the 12 months ending June.

Even If the employment situation in Japan Is getting worse, it is still far from being serious," the economist said, adding that. It was "premature" to talk of the end of the system of life employment in Japan, traditionally one of the pillars of the country's social cohesion.