Major companies had to resort to early retirement schemes, at the risk of losing their better employees along with the dead wood if the package proved too enticing.

Disreputable companies bullied unwanted employees, forcing them to hand in resignation letters so that the employers could save on severance pay.

But last year, when Japanese exports were stunted by the worldwide slump, employers removed hundreds, even thousands, of workers from company rolls in one go.

Whereas Japanese workers in the past were mostly regular employees and society did not condone their dismissal, nowadays one in three workers in the country is either a part-timer or a contract worker.

Japanese companies have to thank the Koizumi administration for the ease of firing workers.

In 2004, at the request of business leaders, then prime minister Junichiro Koizumi made it possible for job agencies to dispatch temporary workers to fill jobs on factory floors.

Politicians touted it as a job-creation measure while companies said they needed the cheap labour to be globally competitive.

After 2004, the number of temporary workers rose by about a million a year until they accounted for slightly over one-third of Japan's workforce of nearly 67 million.

There were jobs aplenty for those willing to work. Cheap company dormitories compensated for the meagre wages.

In hindsight, the dice was loaded against such workers from the very start.

Although the law encouraged companies to convert temporary staff to permanent employees after one year, few employers bothered since they were not legally obliged to do so.

The law required that temp staff be made permanent employees after three years, but again few companies complied due to the higher manpower bill it entailed, preferring instead to hire new and cheaper workers.

A part-timer typically costs his employer about 2 million yen (S$32,000) a year, a third of what has to be paid to an employee with permanent status.

Earlier this week, the captains of Japanese industry pledged to work with the government to secure jobs for workers. Mr Fujio Mitarai, head of the powerful Nippon Keidanren business association, even suggested work-sharing as a way to help workers keep their jobs.

But the calls of business leaders rang somewhat hollow as many companies had in the past few months already announced the laying off of thousands of workers.

According to labour ministry estimates, some 85,000 workers will have lost their jobs by March 31, the end of the Japanese fiscal year, mostly in the car, electronics and precision machinery sectors.

Daiwa Institute of Research, a private think- tank, has even predicted that as many as 1.7 million workers may be laid off by the middle of this year.

When part-time workers are thrown out of work, most of them end up on the streets as they cannot afford to find new homes. Already, the government has had to provide shelter for several hundred jobless workers in the Tokyo area, making use of vacant public housing.

Finding homes for such people is not just about letting them live decently. Without a home, a person in Japan cannot find a job. It is the rare Japanese employer who will hire someone who cannot produce a permanent address on his resume. And without work, a person has little hope of finding a landlord willing to have him as a tenant.

Of late, there has been another furore after the disclosure that many big companies that have retrenched workers are, in fact, flush with cash.

According to a Kyodo news agency report, 16 companies, many of them household names, have a total of 33 trillion yen between them.

Carmaker Toyota, one of the first to fire workers on a large scale and which wants to cut the pay of workers on days when it halts production, reportedly holds some 13 trillion yen in retained profits.

Another carmaker, Honda, is said to have 5 trillion yen while electronics giants Sony and Canon have nearly 3 trillion yen each.

'These companies can afford to pay all their staff the present level of wages for five years even if all their workers do is to pluck grass,' the evening tabloid Gendai quoted an anonymous corporate source as saying.

Companies say those reserves are needed for future investments.

But despite poor earnings forecasts for this year and having to trim their workforces, many large firms are expected to dip into their reserves in order to pay their shareholders the same, or higher, levels of dividends as last year.

On Tuesday evening, some retrenched workers demonstrated outside a reception attended by top business leaders, demanding that they spend their companies' ample reserves to secure jobs.

Even the government has highlighted the social responsibility of companies and asked them to put their huge savings to good use.

Said Chief Cabinet Secretary Takeo Kawamura: 'Under present circumstances, using retained profits to retain good workers will help prepare for the future. The attitude of employers is being questioned.'

But companies have yet to respond.

Meanwhile, Prime Minister Taro Aso has been quick to announce several measures to help the downtrodden, including subsidies for companies to persuade them to hang on to their temporary workers.

But he is dragging his feet on securing the necessary budget, apparently out of fear that once he does so, he may be pressured by the opposition into calling an early general election.

The Japanese leader is suspected of being in no hurry to go to the polls as he is not confident that his Liberal Democratic Party will do well, given that Japanese voters are increasingly disenchanted with his leadership.

A general election is technically not due until September but Japanese workers cannot hold off for much longer without help.

wengkin@sph.com.sg