Temporary Workers in Japanese Drinking Establishments Face Financial Turmoil with Little Outside Support

The business of meeting new people is, in the pre-COVID days, was a lucrative one here in Japan. Even in the most residential of suburban neighborhoods, Japanese-style izakayas and Western-style bars are physical locations where friends and colleagues get together to complain about the travails of their daily lives over glasses of beer or cups of sake. For those without anyone to speak to, a bit more money in host or hostess bars will furnish the customers with male or female companionship, not for erotic purposes, but simply to lend an ear to the conversations.

COVID has made the survival of the entire industry precarious as government policies specifically target late-night establishments serving alcohol. With the latest guideline calling for restaurants and bars to all close by 8 pm and not to serve alcohol at any time of the day, these neighborhood watering holes are forced to either operate secretly late into the night by breaking the guidelines or become day-time diners that can no longer fully fulfill the very goals of the clientele being there in the first place. While the customers' desire to have somewhere to go for conversations over drinks remains strong, few options remain.

The situation is much worse for the many thousands who make a living in these watering holes. The customers may have just lost a place to spend money and keep up their mental health. Employees of these establishments are staring at the possibility of losing their entire livelihood and physical health. Many Japanese TV programs profile college students that are making their ends meet through part-time jobs in izakayas and late-night dining bars. During interviews, they have unequivocally expressed their financial concerns as their work shifts become less frequent and shorter.

That financial concern is even graver for those working more or less full-time in these establishments. In many conversations with different workers at bars, I found many to see jobs in the alcohol-serving industry to be higher paying and relied on when other, more "regular" jobs dry up. The sense among these workers that bar jobs are more stable is understandable given that they often come from previous jobs working as temporary laborers in small, not-so-profitable companies. Yet, ironically, COVID has proven that even those precarious jobs in small companies ended more secure than the future prospects of many bars.

To be sure, government measures are supporting late-night establishments, but it is questionable how much bar workers can benefit from the measures. The Japanese government, for instance, is paying compensation to dining and drinking establishments for losses commensurate with their inability to sell alcohol and stay open past 8 pm. But their owners would be likely to keep the government payouts for themselves rather than passing some of it onto their workers. For part-time and contract workers, the owners can let them go easily to cut costs, with little legal repercussions for doing so.

For those workers lucky enough to keep their jobs at izakayas and bars, the way their compensation is structured before COVID acts as a further hurdle for them to benefit from COVID. To my surprise, some workers at hostess clubs stated that they are only paid for the time they are with customers and none for time spent waiting, no matter how many hours the wait becomes. Essentially, they are treated as independent contractors rather than employees of the establishment, with no cost to the owner as long as no customers are present. 

The fact that workers willingly agreed to such terms, detrimental to their financial well-being in the best of times, shows that there is a clear imbalance between the owners and workers, in terms of negotiating power, knowledge of contractual terms, and the nature of business performance. Given that many bar workers are young and have not given enough financial education, it is possible that they simply did not understand the implication of their contractor status with little benefits beyond pay and safety net when the business goes south. But it may also speak to the success of these businesses in the pre-COVID days when only getting commission pay on sales was already very good money for the workers.

However, there should be more societal fear that temp workers of watering holes are left behind whether or not COVID eventually goes away. These workers know that what they do now is not a long-term career. They only wish to use the opportunity to make enough money and pursue other life goals. But if COVID prevents them from doing so despite spending so many days and months sitting in empty bars, they would have only aged significantly, without any savings to show for it. The result may be a lost generation that may be forced to work in drinking establishments for much longer than they planned, without getting any richer or wiser as a result.