KODAMA Toshihiro

Toshihiro Kodama on Radio

Job-changing Possibilities as Seen in reemployment of Mine Workers Left Jobless after the Closure of the Mitsui Miike Mine

Senior Fellow at RIETI KODAMA Toshihiro appeared on the NHK Radio 1 program "NHK Radio Evening Edition" (aired Mon-Fri from 6:00pm to 6:50pm) on 9 January 2002. Mr. Kodama was interviewed about measures to combat unemployment issues that had been learned from studying the reemployment situation of the employees laid off after the closure of the Mitsui Miike mine, a subject that Mr. Kodama himself has researched.

Mr. Masahiro Matsuo (Editor in Chief of NHK Radio Evening Edition): The unemployment rate in Japan has now exceeded 5% and the situation continuing now is historically the worst Japan has ever faced. As economic structural reform advances from now on, under conditions that inevitably will bring about even higher unemployment, the question of how to secure work for people is becoming a major political issue. Amid these circumstances, looking at cases of coalmine closings that produced great numbers of unemployed workers in the past can be of help in formulating future responses. Senior Fellow at RIETI Toshihiro Kodama, who has studied the closing of the Mitsui Miike mine, joins us in the studio today. Mr. Kodama, thank you.

Ms. Rie Iwai (Anchor, NHK Radio Evening Edition): Welcome to the show.

Toshihiro Kodama, Senior Fellow, RIETI: Thank you.

Iwai: First, what led you to have an interest in the reemployment situation of unemployed mine workers?

Kodama: My previous job was with the Economic Planning Agency, which is now integrated into the Cabinet Office. There I was in charge of studying regional economic trends, and I felt strongly at the time that there were rampant mismatches in labor demand and supply. During the economic upswing in 2000, it was repeatedly said that mild improvement was continuing, and this was true regionally as well. I was in charge of starting up a survey called the "Economy Watchers Survey," which listens to the voices of the people at the forefront of the business world, such as retailers, taxi drivers and so on.

Matsuo: So you wanted to hear it straight from the people in the real economic activities?

Kodama: That is correct. Very often I received such reports from employment "watchers." Although job openings increased rapidly in the first half of 2000, they could not all be filled to due to labor scarcity. These reports said this was evidence that the economy was getting that much better. However, as we enter the second half of 2000, despite the high demand for labor, the qualified human resources are not available and in the end employment does not increase. So their views changed; they judged that at this rate, the economy will not really improve. This is quite in line with macroeconomic indicators. Economic conditions began to improve, production activities come alive, and businesses' demand for labor goes up, but there just weren't enough of the kind of people with the technological qualifications needed by businesses, for example, in IT, marketing professionals, and in certain areas of the services sector. As a result, employment stagnated. When employment does not grow, neither does private consumption. So we had a situation where private consumption, which accounts for over 50% of GDP, doesn't grow, and in the end the Japanese economy has not achieved a self-sustaining recovery. We enter 2001 and the US economy slows, there is an IT recession, and the Japanese economy entered into its retreat. Employment also continued to worsen. With rampant employment mismatches, human resources must be transferred to the sectors that will grow. Labor shift is what we need. This is an essential challenge of structural reform of the Koizumi administration. In particular the impact of the disposal of non-performing loans is manifesting itself in specific industries, such as the construction industry and the distribution industry. Therefore, there will definitely always be people who have to switch to a different type of industry or job as structural reform is advanced. I approached my study wanting to find some kind of clue as to what extent this is possible, and to see if this could be of help in advancing structural reform.

Matsuo: So you started your study with a view to finding out what was currently relevant?

Kodama: Yes. And the coalmine closings in our country have generated great numbers of people who must switch to other industries and job types.

Matsuo: We have seen the occurrence of a huge labor movement unprecedented in Japan. Which mines in particular did you study?

Kodama: The coal mining industry has a history of over 40 years of rationalization, including mine closures and employment reduction.

Matsuo: These things were advanced considerably amidst the so-called "energy revolutions."

Kodama: Yes. The most recent example of the closing of a large mine is the March 1997 closing of the Mitsui Miike Mine that extended across Fukuoka and Kumamoto prefectures. Currently, the Ikeshima Mine, another coalmine in Kyushu, and the Taiheiyo Mine in Hokkaido are facing closure or the proposal for closure is being discussed, but the most recent example of a mine closing whose results are known was that of the Mitsui Miike Mine, so I studied that with the wonderful cooperation of the local people involved.

Matsuo: The Mitsui Miike Mine was a significant large coalmine with a long history. About how many workers were displaced?

Kodama: The total number of employees discharged from Miike Coal Mine of the Mitsui Coal Mining Industries Co. Ltd. itself, the primary and secondary sub-contractors and subsidiaries with capital tie-ins, was 1,553. In addition, about 30 people were displaced from jobs at the main businesses dealing with the mine, but in terms of people whose subsequent reemployment statistics we can track, the number is 1,553.

Iwai: I suppose the fact that they had been mine workers affected the reemployment of these displaced people. What were some of the characteristics in this regard?

Kodama: Certain aspects of their job seeking circumstances made reemployment difficult. People who had worked at the mine itself wanted to be rehired locally. The desire to work close to home was extremely strong. When I asked people from Mitsui Coal Mining Industries Co. Ltd. and its parent company Mitsui Mining Co., Ltd. about this, they said that when the mines in Sunagawa and Ashibetsu in Hokkaido were closed, the displaced workers there also wanted to find work locally. I didn't study that closely, but it seems like many of the construction workers traverse the nation, but mine workers have a stronger tendency to want to stay in one place than workers in other industries. When you are that strongly locally oriented, it limits the geographic scope in which you can look for a job. In addition, although this depends on type of job in the mine, coalmine workers were granted a maximum of three years of payments equivalent to unemployment allowance when dismissed. Usually, under today's scheme, in case of bankruptcy or dismissal, the maximum is 330 days, but the coalmine workers had three years of unemployment allowance.

Matsuo: That means they were able to dig in and stay put for a while to search for a new job. In the end, how many people were able to be reemployed?

Kodama: Of the over 1,500, 1,317 have continued to try to find new employment. Of these 1,317 people, 1,065 people found jobs, a reemployment rate of a little over 80%.

Matsuo: That seems like quite a high percentage to me, but in the case of displaced mine workers, aren't many of them relatively advanced in age? Are you saying that 80% of these relatively older people also achieved reemployment?

Kodama: There are several public employment security offices to handle this. As far as the scope covered bythe Omuta Public Employment Security Office, only 50% of those 56 and older found jobs. This figure jumps to over 90% for those younger, particularly 97% of those under the 50 found work. This is also a situation unique to coalmine workers, since pensions are paid from the age of 55, the older ones were in a situation where they perhaps didn't feel such a sense of urgency. Therefore, the people with a higher need for work achieved reemployment earlier. It took four years, but on the whole, about 80% as a whole were able to find new work. From March 1997, the economy went on a decline and economic conditions were very harsh. When that is taken into consideration, I think you can say that this was a quite successful case.

Matsuo: I see.

Iwai: What were the popular types of jobs in which they were reemployed?

Kodama: In the order of the number of people reemployed, they were the manufacturing, construction, services and transport industries.

Matsuo: So there were many people reemployed in the manufacturing industry?

Kodama: There were a lot of people who were, for example, workers in the production lines and people in maintenance of machines and electrical equipment in the manufacturing industry.

Matsuo: I guess the type of job changes quite a bit.

Kodama: The type of job changes naturally. They are different industries. There are no mining jobs there. Although there were no cases of field workers who became office workers, partly because they so wished, the industries and types of jobs they assumed were quite different.

Matsuo: I am sure that there were many people who found reemployment in different industries and types of jobs, but what kind of support measures were available for them?

Kodama: Including the local areas of Omuta and Arao, local municipalities, prefectures and the national government, the public employment security offices including Omuta, vocational schools and, taking account of the negotiation results between labor and management, Mitsui Mining Company Ltd. and Mitsui Coal Mining Industries Co. Ltd. made the best efforts together to seek and introduce jobs. What are remarkable in this effort are concerning vocational training and employment consultations. Due to the fact that facilities at public vocational training facilities are insufficient, there has been public-private cooperation to expand numbers of trainees at these facilities and commission the work to the private sector.

Matsuo: Was vocational training implemented at the offices of private companies?

Kodama: It was implemented at private special professional schools. One more remarkable aspect was employment consultation. Due to the fact that at the public employment security offices both time and space are in short, a temporary employment consultation office was established and a total of 24 support counselors were dispatched to these offices. The support counselors were for the most part former employees of Miike Coal Mine, who were experienced directors of the labor union or staff in charge of labor management.

Matsuo: Which would mean that, depending on the case, these counselors would be acquainted with the job seekers and also have a sound knowledge of the content of their former work.

Kodama: That is correct and is what in my opinion was very important. I think that what is the most important challenge now is to match job offers with job-seekers and for this it is important to provide good mediation and provide good information. In the case of the closure of the Miike Coal Mine, I think it is still a most suggestive point that the people providing the counseling were in a position to know very well the situation of the people looking for work.

Matsuo: Is it still the case that vocational training and detailed employment counseling are important factors to be reviewed, even given today's employment situation?

Kodama: Due to the fact that there are a variety of industries, it is not the case that this method can be applied to all cases, but the most significant point of this example is that it demonstrates instances where reemployments have been achieved in different industries and different types of jobs. This is very important.

Matsuo: This know-how is one means by which we wish to share information and break through the current severe situation in employment market, is it not? In this case what can the national and local governments do?

Kodama: Rather than maintaining employment, the policy direction towards facilitation of a move to growth sectors is of importance. To this end a scheme of job introduction and education and training are to be developed on the national and local level. This is how current policy is tending towards, but concerning public employment in the supplementary budget, this should not be short-term employment but one that I hope will play a role of a mediation of information between job offers and jobs seekers.