TOKYO (Reuters Life!) - Kamematsu Morimoto had a job that comfortably supported his family of six in Japan's car manufacturing hub until the global economic crisis struck, leaving him, and thousands of others, without work.
In the midst of Japan's worst recession since World War Two, companies have laid off more than 230,000 contract workers in the year since the collapse of U.S. investment bank Lehman Brothers last year tipped the world into recession.
That has helped push Japan's jobless rate to a record high 5.7 percent.
"I look for work everyday but I just can't find anything," said Morimoto, a 55-year-old grandfather of two who had to sell the family car to qualify for welfare.
"My employment insurance ran out at the end of June, so I'm living on welfare now."
Coping with the unemployment crisis will be a big challenge for incoming prime minister Yukio Hatoyama, whose Democratic Party is expected to usher in a government pledged to pay more heed to the rights of consumers and workers.
The Democrats have pledged a ban on sending temporary workers to manufacturers, a move unions welcome but companies warn will push factories to relocate overseas, threatening more job losses.
Japan's economy has shown some signs of emerging from recession. Toyota Motor Corp announced this week that it would hire about 800 temporary workers in October to meet production demand as global auto sales gradually recover.
Still, the government warned in a report this week that a record jobless rate was clouding the economic outlook.
"The number of jobs in Japan's manufacturing industry is still low, so those with unstable work are losing their homes and people are still coming to our support center," Isao Matsumoto, an official at the state-run Tokyo Challenge Net, said recently.
"Until the economy gets better, I don't see that changing," added Matsumoto, whose program provides interest-free loans for apartment rentals and advice on jobs and legal hassles.
Non-governmental organizations say the lay-offs are forcing more people out of their homes and onto the streets.
"Usually we get 300 people at our soup runs, but recently we're getting closer to 500," said Kazuaki Kasai, who runs a group that supports homeless in downtown Tokyo.
"Of the new faces, about half are younger people and half are laid-off construction workers," said Kasai at a festival for homeless where hundreds gathered to pray for 21 people who died on Tokyo's streets last year -- and to receive free food.
Moyai NPO, a group that offers job and housing advice to the working poor and homeless, says contract workers are especially vulnerable because Japan lacks a dependable social safety net.
"Temp workers live in company housing so when their contracts run out, they have to leave," said the group's Tsuyoshi Inaba.
"We meet with around 200 people a month, double last year."
A group offering free meals to homeless in Nagoya city, in Japan's manufacturing heartland, also reports a spike in numbers after the recession punished the region, cutting nearly 40,000 contract jobs and boosting the number of people on welfare.
"Since November we've been serving more and more meals at our soup kitchens," said Shoko Ichihara, a staffer at a Nagoya group that offers free meals twice a week. "Volunteers tell me more young people and a few more women have started showing up too."
Available jobs hit a record low in July, with more than two applicants for every position, government figures show.
"I don't think I'll have a job until next year," said a 29-year-old former Sumitomo Electric worker now living on welfare who asked not to be named.
"I've gone to interviews where they say they'll only hire one person, but about a hundred people show up."
Editing by Linda Sieg and Miral Fahmy