Japan scraps 24-hour culture to keep down wages （652 words）

By Robin Harding in Tokyo

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They were a late-night home away from home for the reporter on a stake-out, the student with an essay to write and the denizens of Tokyo’s demimonde. At a 24-hour “family restaurant”, a few hundred yen would pay for soft drinks and a safe, well-lit seat to while away the night.

No longer. At the end of January, the Royal Host restaurant chain closed its last 24-hour famiresu, as the cultural staple is called, in the Tokyo suburbs. Shortly afterwards, restaurant chain Skylark group closed 310 of its restaurants during night hours, leaving just 100 that still stay open around the clock.

The end of 24-hour service is partly because there are fewer students in Japan’s ageing society. But the main factor is the growing shortage of casual staff — a big issue after four years of robust economic growth — that makes it hard to operate profitably during late-night hours.

“The number of late-night customers is falling, but the number of staff willing to work nights is falling too, and if there’s a shift you can’t cover then it’s impossible to open,” says Minoru Kanaya, chief administrative officer for the Skylark group.

“People working in the middle of the night are mainly driven by money. It isn’t that they want to work then — they do it because the pay is good,” says Mr Kanaya. “And for those hours the wage rates have been increasing steadily.”

The late-night shutdown by Skylark offers an answer to a big puzzle about Japan’s economy: why are growing labour shortages and an unemployment rate of just 3.1 per cent not spurring wage inflation and upward pressure on prices? Inflation is stuck near zero, far below the Bank of Japan’s 2 per cent goal.

Meanwhile, the ratio of jobs to applicants, 1.36, in Japan is now at its highest level for 25 years. Permanent positions for office staff are still easy to fill, thus holding down the overall ratio.

For waiters there are 3.8 jobs for every applicant; for drivers the ratio is 2.7; and for builders it is 3.95 times, highlighting just how tough it is to hire for service jobs. Companies are raising wages to some extent, hiring more women, and employing foreign guest workers.

According to interviews across a range of industries, however, companies are also rejigging their operations to improve working conditions to attract staff while keeping the total wage bill under control, even if they lose sales.

These adjustments to Japan’s culture of hard work and extreme customer service make life better for employees, but they do not lead to higher wages, incomes or consumption, helping to explain how companies keep prices under control.

At Yamato Transport, the delivery service known affectionately in Japan as ‘Black Cat’ for its logo of a mother cat carrying a kitten, the biggest challenge is recruiting the long-distance drivers who criss-cross the country between the company’s 69 sorting centres every night, says project manager Kazuo Hatakeyama.

“For example, a long-distance driver might leave Tokyo at 9pm and arrive in Osaka at 5 or 6am the next day. Then they need to take an eight-hour break, so they can’t return to Tokyo until the next night,” says Mr Hatakeyama, who works in Yamato’s strategic network division.

To make that assignment easier, the company is shifting from point-to-point moves between its sorting offices to a system of three highly automated ‘gateways’, including one in the central city of Nagoya. Truckers from Tokyo and Osaka now meet at Nagoya, swap vehicles, and then drive back to where they started.

“In that way, the driver can get home the next day,” Mr Hatakeyama says.

At some point, fixes like this will run out. Companies may then feel forced to pay more and charge more. For now though, after deflationary decades in which they made profligate use of cheap labour, businesses are finding plenty of other ways to adapt.