New infections may be falling across Japan, but with a state of emergency still in force across major urban areas, the economy is suffering. Last year was a killer, recently released data show: Industrial output fell 10% to a seven-year low in 2020, while average monthly spending by households was down a record 5.3%. And there’s more to come in 2021.
Business failures due to the pandemic have now topped 1,000, with the restaurant industry seeing the largest number of failures by sector, at 182. Restaurants, bars and karaoke parlors are again facing onerous curbs on their operations under the emergency — a move that could have a long-lasting impact on the nation’s culinary landscape, writes Alex K.T. Martin.
In the real-estate sector, land prices in downtown districts of Osaka plunged by up to some 23% in January-September last year, while Tokyo prime office prices fell 7% in 2020, ending eight years of gains. As people continue to work from home, firms such as ad behemoth Dentsu and logistics firm Nippon Express are considering selling their Tokyo offices.
With telework the new normal and tourism on pause, rail companies are also struggling. JR West logged a consolidated net loss of ¥162 billion for April-December 2020, its first recorded red ink for that nine-month period, and is continuing its furlough program through February. JR Central is encouraging thousands of its staff to take paid leave as it cuts services.
Japanese labor law requires employers to pay workers 60% or more of their salaries if their firms order them to take leave, but a third of furloughed contract workers have received no such compensation during the pandemic, a recent survey shows, compared to 16% of regular workers.
A program was set up last June to allow workers to apply directly to the state for lost earnings in these cases. More than half a year — and two states of emergency — later, the program is being extended to cover nonregular staff at large firms, with applications being accepted from later this month.