Cocooned in the mountains of Nagano, Japan, employees at Ina Food Industry Co. begin the day by tidying the garden around their office and factory buildings. The smell of freshly cut grass perfumes the summer air as loudspeakers pipe out the company song: “… surrounded by the green of pines, showered by the happiness of the morning sun, the gathering of our comrades. … ”
As usual, the company’s patriarch, Hiroshi Tsukakoshi, who turns 83 in October, greets his employees, reinforcing the sense of community and security he’s created over more than six decades of running the business while never cutting a single job. And he doesn’t plan on doing so now, even as the Covid-19 pandemic causes the worst economic crisis since the Great Depression.
Tsukakoshi has told his workforce of 500 or so that all their jobs are safe. Even though sales are forecast to be down about 15% this year, he says, Ina Food’s employees will still get modest annual raises and their traditional summer bonuses. “If a company grows in volatile fits and starts,” he says, “people are increasingly gripped by fear and fret over when they will be fired. You have to maintain incremental growth to keep your people happy.”
That approach to doing business has made Ina Food, which produces a gelatinlike substance called agar from algae, something of a poster child for success in Japan’s low-growth economy. Akio Toyoda, president of Toyota Motor Corp., has toured the company and touts a book Tsukakoshi wrote on management. In the reception area where Tsukakoshi greets visitors, a photo on display commemorates the time Bank of Japan Governor Haruhiko Kuroda stopped by in 2015.
Ina Food represents a sepia-toned, somewhat idealized side of the world’s third-biggest economy—one that offers a dose of optimism to a world that may be headed down a similar trajectory of high debt, endless stimulus, and anemic growth. After 30 years of flat-lining, the country still boasts one of the developed world’s best living standards and a jobless rate of just 2.9% in July.
“Japan is like a family that didn’t go on vacation but built up a bank account,” says former U.S. Treasury Secretary Lawrence Summers, a paid contributor to Bloomberg TV. “The consequence is the family will be in a better place when Dad becomes unemployed.”
In recent times, global policymakers had come to see Japan more as a cautionary tale than an economic role model. But as the pandemic destroyed tens of millions of jobs around the world, that view has shifted, with some economists considering whether the Japanese model is in fact a template well-suited to current conditions.
Amid the Covid-19 crisis, thousands of companies were able to keep their doors open and employees on their books this year—and over the past 30 years, for that matter—thanks to cheap loans and the lingering jobs-for-life culture. Summers says longtime critics should be “a little bit more humbled” as Japan’s low-growth, low-interest-rate trend becomes a norm in Europe and the U.S.
But there’s another, grittier side to the Japan story. For almost every Japanese worker enjoying the kind of job security that’s a distant memory in most other industrialized nations, there’s somebody toiling in a low-paid role with no such protection.
Tatsumi, a 36-year-old single mother who asked to be identified by her family name only, is one such person. She lost a dishwashing job that paid 1,000 yen ($9.46) an hour in June when the pandemic shut the restaurant where she worked in Hyogo in the center of the country. “They used me like a pawn when business was good,” she says.
Tatsumi is part of Japan’s underclass. Over the decades of stagnation, companies have resorted to part-timers, contractors, and seasonal workers to cut costs. Known as nonregular workers, with little job security and few benefits, they make up roughly 40% of the labor force. About 70% of them are women.
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