The “Indian curry” lunch is a Japanese worker’s staple. Two or three mildly spiced dishes, paired with unlimited quantities of slightly sweet and extra fluffy naan, typically with a small salad and drink — a bargain at only ￥1,000 (US$6.34) or so.
This is not Japanese curry rice, but another variation, one that, like its British analogue, has adapted to the local market. Most “Indian” places — estimated to be north of 4,000, more than the number of McDonald’s — are actually run by Nepalese.
Concerns are growing that the curry lunch might be endangered, along with 24-hour izakaya pubs and other food service businesses increasingly dependent on foreign labor. With the sector already facing the strain of inflation, migrant workers and owners are being squeezed by limitations on visas.
There are two separate issues here. The first is shifting rules for business-owner visas, with stricter conditions that include hiking capital requirements from ￥5 million to ￥30 million, beyond the reach of many of those Nepalese owners. Intended to crack down on wealthy outsiders creating paper companies with no actual business, fears are rising that it is hitting family-owned foreign restaurants. Bankruptcies in the category reached a 30-year high last year, with surveys finding one in 20 are thinking of closing down.
At the same time, it is becoming harder for eateries to hire foreign staff. The Specified Skilled Worker system, set up in 2019, brings overseas labor across multiple sectors. Food services hit its cap of 50,000 workers, forcing authorities to suspend new issuance. The industry, already extremely sensitive to prices, has grown increasingly dependent on foreigners, particularly in the larger cities, and not just in Nepalese restaurants.
While you might think this is the doing of Japanese Prime Minister Sanae Takaichi’s administration, which has made tightening immigration one of its flagship policies, both issues originate with her predecessors. The question is how Takaichi responds, as some want the government to expand the visa cap and revoke the higher capital requirement.
Any move would need to be carefully considered. The reaction to comments from the head of one of the country’s largest low-cost food chains, ramen and Chinese-food purveyor Hiday Hidaka Corp are indicative. If it cannot recruit foreigners, president Hiroshige Aono said on a TV show, outlets would be forced to turn to local high-school or university graduates. The company issued an apology after users on social media accused him of looking down on local workers.
In reality, there are not enough domestic staff for these jobs — at least, not at what they pay. The cost of increasing wages is going to be reflected in the product, meaning costlier lunches. Something has to give.
The issue reflects a kind of “impossible trinity.” With its population declining, Japan can preserve only two of three things — cheap everyday services, rising wages or minimal immigration. It cannot have all three at once.
For most of the Lost Decades, it opted for low prices and little immigration. Wages did not rise, but that was alright as long as the curry stayed cheap. Indeed, a good chunk of its social stability was down to the fact that life could be quite comfortable, even if pay was stagnant.
As the economy recovers, the price of inputs rises and the population declines, things are changing — and Japan must make a new decision. Automation can boost productivity. However, how much work in a labor-heavy Indian shop can be done by a machine?
Complicating things is the fact that Japan’s labor market structurally makes it more difficult for local workers to move up the ladder into higher-paying jobs, even if more low-paid roles are occupied by foreigners. Things are changing, but the market is still far less liquid than other countries, and people are less likely to change positions.
If wages are to rise, the country must accept either price increases (and probably worse service), or more immigration. Japan’s version does not have to look like the failed programs of some Western economies — and almost certainly would not.
Some of Takaichi’s policies are welcome, such as eliminating visa overstayers. Revising a piecemeal strategy sets Japan up to import the labor it needs and shifts focus to integrating those immigrants who choose to stay. The issues worrying the food sector are a warning, but not yet a disaster. That applications for business manager visas have reportedly fallen 95 percent indicates that far more than just those abusing the system with shell companies are being affected by the onerous rules. There is still time to tweak them to avoid cracking down on hardworking entrepreneurs and needlessly closing restaurants.
Japan can still have its cheap curry lunch, but only if it accepts that someone — diners, employers, workers or voters — are going to have to pay more for it.
Gearoid Reidy is a Bloomberg Opinion columnist covering Japan and the Koreas. He previously led the breaking news team in North Asia, and was the Tokyo deputy bureau chief. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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