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Americans say the same sorts of things on talk-radio shows every day, but in Japan the fear of decline is not in the script. Ezra Vogel, author of the acclaimed 1979 book Japan as Number One: Lessons for America, believes many Japanese companies are still awe-inspiring competitors. But Vogel also points out that the remarkable strengths of a company like Toyota no longer mirror those of Japan as a whole. "Today there is a malaise, a deep recognition that they are no longer on the way up," he says. "There are a lot of basic problems, like the loss of jobs and the realization that they won't surpass the U.S. in high technology as easily as they thought. There are no easy answers, and, unlike the past, no unified response."

Takahashi, the Mitsubishi economist, believes unemployment could still double from the recent postwar high of 3.4%, or 6.5% for people ages 16 to 24. Those figures may not look bad compared with 5.5% in the U.S. or 12% in France, but for a country used to full employment, they are a shock. Japan's famous lifetime-employment programs cover only about 20% of the work force, those lucky enough to be hired by certain blue-chip companies. And these firms have in fact cut staff in subtle ways, by reducing new hires, shedding part-time workers or forcing subcontractors into layoffs.

The 80% of workers who do not enjoy lifetime employment are finding that Japanese managers can be as brutal as any in what the Japanese once derided as the harsh "Anglo-Saxon business world." It is illegal to fire someone without cause and compensation, but employers will try what's called kata tataki, or the tap on the shoulder, to get workers to quit voluntarily. The humiliation might come in the form of a salary cut, a stupid assignment or some other type of harassment.

In the past 10 years the number of psychiatric clinics offering help for the burned-out, laid-off salaryman has increased tenfold. Many can't face the shame of telling their families, and they rarely have friends outside the office. Dr. Toru Sekiya, a Tokyo psychiatrist who specializes in such cases, is working almost around the clock. "What's happening is terrible," he says. "Not only are companies getting rid of older employees, they are also dumping those who are capable, hardworking and young. It's like murder to destroy the careers of young people."

If the rest of Japan's traditionally close-knit, well-ordered society were intact, the workplace crisis might be easier to accept; but there is turmoil in the schools and the family as well. Japan's public schools still produce consistently literate and numerate graduates. Nevertheless, a recent poll showed that 64% of parents distrust teachers and 67% are unhappy with the education their children receive. One apparent reason is the worsening problem of bullying, which has led to at least 20 suicides among schoolchildren since May 1994. The problem escapes easy explanation, but most experts think it is rooted in the extreme conformity demanded in public school, right down to the pencils and schoolbags of the children. Children who step out of line face merciless hazing, not only from students but also from teachers.

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