Tokyo’s Nightlife Exposes Coronavirus Risks To Japan’s GDP

Economists gauging coronavirus fallout in Japan are scrutinizing data on jobs, consumption and corporate profits. Yet the real insights may be found in Tokyo’s nightclubs and bars.

Make that rather empty nightclubs and bars—at least in theory. Since April 7, when Prime Minister Shinzo Abe first announced a “state of emergency,” his government has been clamping down on nightlife establishments. Officials are asking the population to avoid bars that run afoul of social-distancing efforts.

Exhibit A: places that sell a mix of flirtation with alcohol. Who knew, however, that Japan’s ubiquitous hostess bars would be a microcosm of its rather unsteady response both to COVID-19 transmission and the economic fallout to come?

A recent Bloomberg News exposé connects the dots rather convincingly. The report explores how, at a time of increasing coronavirus cases, such establishments “are not only an infection risk but pose special difficulties to the contact tracing needed to stamp them out.”

The whole point of such places is the opposite of social distancing. Face masks aren’t an option. Despite the omnipresence of hostess-type establishments, clients don’t tend to admit they frequent them. This anonymity imperative means bar owners don’t keep detailed visitor logs. 

Bloomberg’s story hones in on a club in the city of Gifu, 168 miles west of Tokyo. As of mid-April, at least 33 people associated with Club Charme tested positive for COVID-19. Herein lies a small, but telling, example of why Japan’s rather laidback emergency declaration is too little, too late.

The nation’s non-emergency emergency remains on oddly half-way affair. Many millions still go to work—and on crowded subway trains. Many eateries and bars are open for that after-work crowd.

This tale, though, bumps into two other challenges with which Japan is grappling right now. One, a dearth of great job opportunities for women. Two, how little coronavirus stimulus is going to the vast ranks of Japan’s part-time workforce.

The first problem may come as a surprise to those who thought Abe’s “womenomics” policy spent the last seven-plus years narrowing gender disparities. Abe has talked a great game of creating, as he put it, a “Japan in which women can shine.” The idea, at least as originally stated, was to prod companies to name more female executives and board members and reduce the gender pay gap.

Instead, Abe morphed Japan’s other half into a shiny object of political spin. His team still shows up at every gender-progress conference they can. And sadly, organizers of such events seem all too keen on being a prop for a government doing little for Japan’s female masses.

How little? On Abe’s watch, Japan fell 20 rungs on World Economic Forum’s annual gender-gap report–from 101st in 2012 to 121st now. Trailing United Arab Emirates, Benin and Timor-Leste is hardly where Abe boosters thought Japan’s women would find themselves in 2020. Female participation in policy also has gone in reverse. Japan ranks 164th in women in parliament compared with 105th ranked Saudi Arabia.

It’s a problem, too, that some of the gender “wins” about which Team Abe boasts are anything but. Case in point: the steady rise in female labor participation. As of January, it was 71%, the highest in 10 years. What’s also rising, though, is women’s share of “non-regular” work.

Roughly two-thirds of all such part-time gigs are held by women. These roles pay less, provide fewer benefits and offer little job security. This trend toward the informalization of labor helps employers contain costs, but they also make it easier in times of turmoil—like now—to cut staff. Especially, female staff.

Another underreported trend is rising female poverty rates, particularly single mothers. As such, many women across Japan moonlight in the hostesses-bar space. Moreover, as Japan’s lifetime employment system buckles, the women who hold most of the jobs easiest to chop are increasingly in harm’s way.

That gets us to the second challenge concerning underwhelming government stimulus efforts. Over the last few weeks, Abe’s team detailed $1 trillion worth of fiscal pump-priming aimed at staving off a deep recession. Initially, the cash wasn’t available to hostesses and other such workers. After a loud outcry, the Health, Labor and Wealth Ministry took steps to include such laborers.

But this, too, is emblematic of how the gig economy is falling through the cracks as Japan’s coronavirus outbreak intensifies. Granted, Tokyo claims it will provide assistance to freelancers as part of efforts to help small businesses. Ask Americans, though, how stimulus pledges are working for them. Add in Tokyo’s notorious bureaucracy and there’s little about Abe’s $1 trillion plan that seems rapid, nimble or easy to access.

What’s more, the above-mentioned hostesses could be the vanguard of something else: the coming mass termination of temporary workers as COVID-19 fallout grows. In a recent report, Dai-ichi Life Research Institute warns of service-sector job loss among non-permanent workers beyond anything seen after the 2008 “Lehman shock.” A poll by Tokyo-based Research Institute Advancement of Living Standards found that already 56.8% of temporary workers saw incomes drop.

At just under 14,000, Japan’s coronavirus caseload remains low relative to America’s 1 million-plus infections. It won’t last as Japan increases its testing capacity and learns that its “lockdown lite” approach risks a far bigger outbreak. And, it follows, economic fallout that could’ve been avoided.

To find out why, you could peruse any number of data sets. Or, just wander past Tokyo’s bevy of hostess bars the government somehow deems essential.