The Health, Labor and Welfare Ministry likely will establish a system in fiscal 2009 to help net cafe refugees (young people who live in all-night lounges and are feared to become a new class of working poor) make the transition into permanent employment by providing loans for living costs on the condition they undertake public vocational training, sources said Saturday. Net cafes are equipped with sofas, drinks, computers and manga. The netto cafes are designed for businessmen who want to slack off for a few hours or for commuters who missed their last trains home.

 Japan has been alarmed by growing reports of young day laborers who are staying in round-the-clock cafes rather than renting and living in apartments. A five-hour stay at an Internet cafe in Tokyo costs about 3,000 yen (25 dollars) with a meal served. Showers are available at 200 yen for 30 minutes and underwear is on sale. 

The system would provide monthly loans of 150,000 yen to young people forced to spend their nights in Internet cafes after being evicted from their homes due to an inability to pay rent. Those with an annual income of 1.5 million yen or less after completing the training courses will be exempt from repaying the loans–meaning the funds effectively will become stipends. The ministry plans to allocate 100 million yen for the system in its fiscal 2009 budgetary request.It is easy for Net cafe refugees to get trapped in a vicious circle. With no fixed abode or employment, they are often left with no alternative but to scratch out a precarious, low-income living that, in turn, increases the difficulty of finding gainful work. Net Café Refugees, are part of Japan’s Lost Generation that saw their prospects hurt during the long downturn in the 1990s but are yet to benefit from the economic comeback of the last few years. Over half work casually on a day-to-day basis. In Tokyo, the average monthly income is just $950—insufficient to rent a one room apartment—and 40% said they had experienced sleeping on the street.

About 5,400 people nationwide are estimated to be living like this, according to a ministry survey conducted last year. Sleeping in net cafes can be problematic “in terms of employment security, hygiene and development of job ability,” said the labor ministry official. In 2007, 13 people contracted tuberculosis at an Internet cafe just west of Tokyo that health officials suspect originated from the cafe’s homeless population.

Refuge sought by the homeless are not limited to Internet cafes. Many also congregate in all-night saunas and 24-hour fast food outlets. Many Net cafe inhabitants rely on their cell phones to arrange day jobs that don’t require a fixed address. But the casual nature of the work means such workers often receive minimal wages and no training, social security or health insurance.

Under the envisioned new system, an Employment and Human Resources Development Organization of Japan fund would be activated to provide loans of 150,000 yen a month to people on employment courses.

The program, to be known as the “Japan dual system,” would involve a combination of lectures and workplace training. Courses would last from three to six months.

The ministry aims to encourage people to enroll in the courses by providing financial assistance for accommodation and living expenses during the training period, when trainees will have little opportunity to earn money. It hopes such support will allow people taking courses to devote themselves to their training.

“[We hope] people can secure accommodation and find opportunities for employment,” a ministry spokesman said.

The ministry anticipates the loans will be available to “irregular workers who have lost their permanent residence.” Such people tend to be young, aged 39 or less, stay overnight in places such as Internet cafes, and are employed on a daily basis in dispatch work or in similar, irregular jobs.

‘Rengo’, the Japanese Trade Union Confederation, comments on the freeters;

Emerging Problems of Freeters (Freelance Part-Time Workers) and NEETs (Young People Not in Education, Employment or Training)

Due to high turnover (the so-called 7/5/3 phenomenon*) among young workers, their unemployment ratio remains as high as 10%. Freeters amount to 2.13 million, increasing by 100,000 a year, while NEETs are reported to number 640,000. 40% of freeters receive financial assistance from their parents and siblings, and their marriage rate is lower than that of non-freeters. They have emerged as a social problem not only from the concern of their impoverishment due to low wages but also because they could gravely undermine the social security system through their positioning outside of the coverage of pension and health insurance plans.

(* 7/5/3 phenomenon: 70% of secondary school graduates, 50% of high school graduates and 30% of university graduates terminate employment within 3 years of entering a company.)

The proportion of youth NEET has more than doubled since doubled since 1990. This includes those suffering from the ‘Hikkomori’ (literally; ‘shut-ins’) syndrome; “One million Japanese, or almost 1 percent of the population, are estimated to suffer from hikikomori, defined as a withdrawal from friends and family for months or even years. Some 40 percent of hikikomori are below the age of 21.” Western psychologists have compared it to extreme social anxiety and agoraphobia (fear of open spaces)