PACIFIC REPORT : Japan Scurries to Stretch Its Labor : Employment: The Asian nation is tapping women and the elderly for its work force and is automating more. The effort may even increase its competitiveness.

TOKYO â€”  At first glance, Japan doesn’t look like a nation suffering from a scarcity of workers.

Houses here are still custom-built in the most labor-intensive manner imaginable--using lumber from thousands of tiny, inefficient mills. Department stores station women with high-pitched voices to greet customers in elevators and in front of escalators. Gas stations look like those in the United States in the 1950s: Young men and women stand around until a car comes in and then rush to clean the windows and check the oil.

Yet, labor shortages are the subject of dozens of government reports and news stories. Almost every company has a corporate strategy to cope with shortages. The labor crunch is also at the heart of a national debate over continuing to allow foreign workers.

Thus far, serious labor shortages are limited to a few industries. “Japanese youngsters are avoiding the ‘three Ks’: jobs that are kitsui (difficult), kiken (dangerous) and kitanai (dirty),� says Hajime Karatsu, chairman of the Japan Productivity Center. “It’s just a matter of mismatching.�

But the Japanese see a broader labor crunch on the horizon and are moving rapidly to change the way they do business. The high level of attention given the issue illustrates a typically Japanese form of social engineering: By exaggerating the nature of the crisis, observers say, Japan spurs change before the situation worsens.

In this case, massive changes now taking place could result in a more focused, productive and competitive nation. Shigeki Seki, a researcher at the International Institute for Global Peace who just completed a major study on Japan’s industrial competitiveness, says if Japan manages to make significant workplace changes, it will develop an economy invulnerable to foreign competition for a decade or more.

Japan is investing heavily in automation, reforming some of its more inefficient sectors to free up labor, altering its employment practices to allow mid-career changes and moving to take advantage of an under-used labor pool of women and the elderly.

While Japan’s labor force has grown at a healthy rate in the past decade, the number of male workers between 18 and 55 will start to shrink beginning in three to four years. The number of births in Japan fell to 1.2 million last year, down from 2 million 15 years ago, probably the sharpest drop in the birthrate of any industrial nation.

Some have suggested that fewer workers will eventually mean slower economic growth. But Japan’s economic planners see other dangers. If the shortages persist, it will be difficult for companies to carry out a national goal of reducing the workweek by as much as 20% over the next five years.

The shortage could also put a crimp in Japan’s industrial development if the most talented youth turn away from engineering, as many business leaders fear that they are now doing. The result could be a decline in the quality of Japanese products, economic planners say.

Japan’s first task, says Naoyuki Kameyama, research director at the Japan Institute of Labor, is to make better use of the human resources available now.

Japan has 1.4 million unemployed, he says. Another 10 million (including 6 million women and 1 million elderly) are not looking for jobs but might work if conditions were attractive enough, he adds. “These people are like underground water. We can tap them if we make some effort.�

But to “tap� these workers, companies must make themselves more attractive and change their employment practices. Japan’s Parliament recently passed a bill, for example, requiring all companies to offer paid, one-year leaves to both fathers and mothers. Although the bill has no penalties for companies that fail to comply, Kameyama believes that companies will gradually accept that it is in their interest to offer the leaves so women can develop full careers at the firms.

While women are filling many jobs they weren’t permitted to hold in the past, some employers say one reason they are hiring more is to help attract male workers who no longer want to work in all-male environments. An official of Takenaka Corp., a construction company, for example, was recently quoted as saying that the company gave women such jobs as operating bulldozers and guiding traffic at work sites in part to “add charm� to the workplace.

Older workers, another traditionally underutilized group, are also getting the attention of employers. The Ministry of Labor has recommended that companies set 65 as a uniform retirement age by the end of the decade. Workers now retire between 55 and 60.

Auto companies are modifying production lines to include older workers. Nissan Motor Co. is experimenting with a production line that includes special machines to help older workers handle heavy parts and avoid extreme movements. If the experiment works, it expects to adjust its other factories for older workers.

Some companies have been set up with the sole purpose of taking advantage of the wasted talents of retired engineers. Meister 60 Co. was established last year to design and maintain mechanical and electrical factory systems. It is hiring only engineers over age 60. Salaries start at only $20,000 a year for full-time work, but such jobs are rare for Japan’s elderly. The major recruitment effort of large manufacturers remains attracting young males. During recruitment season, companies chase down prospective employees, sign them up and send them off on vacations to keep them from being spirited away by other firms.

The larger companies are also sprucing up their workplaces to attract employees. Mazda Motor Corp. has put a bar, Jacuzzi, swimming pool, gymnasium and audio-visual entertainment room in its Hiroshima dormitories for unmarried employees.

About one in four companies offers scholarships of $250 a month or more to college students, requiring that the students work at their companies for several years or pay back the money.

Toyota promises that its new factory, set to open in 1993, will be like working in an office. Workers won’t get their hands dirty, won’t have to lift heavy weights, and the production line will be quiet enough to hear piped-in music.

Smaller companies, unable to compete with the industrial giants for college graduates, are increasingly building schools to educate the workers they need.

Kinden Corp. trains junior high and high school students in its own boot-camp-like technical training program. The $2.9-billion electronics company spends $10 million a year on the school but says the program has assured it a steady supply of high-quality engineers during the current labor crunch.

Daiki, a plumbing and bathroom construction company, couldn’t find tile layers. The traditional apprenticeship system had broken down because nobody wanted to spend the five years it took to learn the trade and take the examinations. Daiki created its own school in which employees study tile laying for one year, then learn on the job the second. This results in licensing in just two years.

But competing for workers from the same limited pool can go only so far in solving the labor shortage. More important, Japan’s national planners say, is for companies to restructure their operations and automate to increase efficiency.

Although Japan is widely perceived to be an efficient nation, its production per worker is actually poor compared to that of the United States. Japan was 31% less productive than America in 1988, according to the Japan Productivity Center. While Japan is comparable to America in manufacturing, in agriculture it is one-third as productive, and its retailing sector is 67% less efficient.

One reason Japanese officials did not object too strenuously to many of the demands the United States made in the Structural Impediments Initiative, suggests a former U.S. trade official, is that Japanese officials knew the changes were needed if Japan was to adjust to an era of labor scarcity. A new law allowing large grocery stores, for example, will help streamline Japan’s distribution system, reducing the need for layer upon layer of wholesalers.

The use of robots and other automation equipment is no longer being restricted to factories but is finding its way into the less efficient service sector. Sanyo Electric, for example, has developed a robot for convenience stores. When a customer buys a ticket for a sandwich, the robot takes it out of the refrigerator, puts it in the microwave and, when it’s ready, puts it on the counter.

Sushi chefs have long speeded up their work with a “robot� device that molds the rice for them.

The Japan Industrial-Use Robot Assn. expects that demand for robots in non-industrial settings will grow to nearly a $1-billion business by 1995--up from $60 million last year--and to more than $2 billion by the year 2000.

Other labor-saving devices are being developed as well. CSK, a computer services company, is experimenting with a system that uses radio waves to pick up data from vending machines throughout the city. A computer calculates which machines need to be refilled, reducing time wasted by delivery trucks.

There is still room for traditional automation. Japan’s national railroads have only recently begun using automatic ticket gates. Private railroads have used them more than a decade.