Voters in Abe’s Heartland Fear His Win Will Mean More Pain

  • Fukui’s economic growth, tight labor market bely wage concerns
  • Workers fear another sales tax hike as wages remain stagnant

A female worker makes eyeglasses temples at Nagai Co. factory in Sabae, Fukui Prefecture. Photographer: Shiho Fukada/Bloomberg

Chiyoko Yamamoto works in one of the best regions in Japan -- a place with one of the lowest rates of unemployment, a growing economy and the highest level of female employment in the country.

Indeed, Fukui, about 300 kilometers (200 miles) west of Tokyo on the Sea of Japan, should be a poster child for Abenomics, the economic model of Prime Minister Shinzo Abe, who called a snap general election on Oct. 22.

A woman walks by a bus station in Fukui, Japan.

Photographer: Shiho Fukada/Bloomberg

Yet Yamamoto, a 53-year-old textile worker, sees little benefit to her or her family from all the years that Abe has been priming the economy with monetary and fiscal stimulus. Like most workers in Japan, she’s seen few signs of the healthy wage gains Bank of Japan Governor Haruhiko Kuroda has consistently promised.

Instead she’s more concerned about Abe’s pledge to raise the sales tax again to help fund the government’s plans.

“It increases my expenses. That’s all I care," said Yamamoto, who has worked for more than 20 years at textile company Fukui Tateami Co. “I can’t say my life is getting better."

Read more: Why Abe called early elections -- a QuickTake Q&A

Fukui is a stronghold for Abe’s Liberal Democratic Party, which opinion polls suggest will retain power in Sunday’s election. With a weak and fractured opposition and public attention focused on national security because of the threats from North Korea, Abe may be set to become Japan’s longest-serving prime minister.

Abe, 63, has also touted his economic record, with six straight quarters of growth, unemployment less than 3 percent and the stock market at its highest level in more than two decades.

Shinzo Abe during an election campaign rally in Sapporo on Oct. 15.

Photographer: Eiji Ohashi/Bloomberg

As evidence of his policy success, he has repeatedly pointed to the rise in the jobs-to-applicant ratio, which is now over 1 in all 47 prefectures. As the nation’s workforce grays and shrinks, Abe has called for women to pick up the slack in the world’s third-largest economy.

“It isn’t easy to get wages to rise, but it’s impossible that wages will fail to increase forever,” said Motoshige Itoh, professor at Gakushuin University in Tokyo and a member of the government’s economic and fiscal policy council.

In Fukui, the jobs-to-applicant ratio is 2.1, the nation’s highest along with Tokyo, and the jobless rate is down to 1.9 percent.

Many women are already working, often in industries like textiles that traditionally employed females, or making up for those who left the region to look for opportunities in Tokyo.

But employers here have seen too many false dawns and wages remain stubbornly restrained. The region, a major center for nuclear power, suffered heavily from the shutdown of reactors following the Fukushima disaster in 2011. Much of its industry is small and medium-sized manufacturers producing cloth or spectacles -- businesses that have slender margins and require many skilled workers.

In the five years through 2016, monthly wages in Fukui have risen 1.5 percent on average, or just 0.5 percent adjusted for inflation, according to the prefecture. This year, both measures are falling.

“Japanese labor costs are still high,” said Yoshihide Takagi, 64, Fukui Tateami’s managing director, pointing to competition from China. “I don’t have a choice but to be cautious about wages.”

Part of the concern among managers lies with Japan’s restrictive labor rules, which have encouraged companies to hire part-time or contract staff, or get cheap foreign workers through a government training program, rather than full-time staff who are hard to fire in a downturn.

At Hironen Textile Industry Co., the factory is booming, thanks to a surge in exports on the back of a weaker yen. Operating profit is growing, the company has added eight new looms, and staff are working flat out to meet orders.

Koichi Fujiwara

Photographer: Shiho Fukada/Bloomberg

The company’s President Koichi Fujiwara has raised the starting pay for new graduates bit by bit, but remains cautious about the future. In the aftermath of the Global Financial Crisis, half the factory’s production stopped, managers had their pay cut and the company held study sessions to get government money for training.

“If I raise pay a lot now, I can’t cut it easily when the economy gets worse,” Fujiwara, 59, said. “I don’t want employees to think wages will keep rising forever.”

Inspection manager Noriko Oda says workers are stretched to keep up with demand, “We check everything with our own eyes,” she said. “We don’t have enough people. We are scraping by.”

Noriko Oda

Photographer: Shiho Fukada/Bloomberg

Despite the high ratio of female employment, Oda, 34, is one of the few women managers, and the ratio in Fukui is lower than the national average. Women in the area typically earn 30 percent less than men.

Hiroshi Kajiyama, minister for regional revitalization, and Seiko Noda, minister for women’s empowerment, declined interview requests for this story.

Faced with a labor crunch, but unwilling to raise wages, some factories are hoping instead for Japan to allow in more cheap foreign labor. In Sabae, Japan’s center for eye-glasses in central Fukui, the number of foreign residents rose 11 percent to 887 in the year through September -- just 1.3 percent of the population. A third of them were in a controversial government program that was set up to train people from developing nations.

“Our No. 1 challenge is to stop people from moving to Tokyo,” said Mayor Hyakuo Makino, 75, wearing a spectacles-shaped jacket pin. “We can’t ignore foreign labor. Without them, our manufacturing base won’t work.”

Sabae has hundreds of frame makers between houses and farmland, but Chinese competition has gutted the business and factories are trying to survive by making high-end frames that can command higher prices.

A worker shapes an eyeglass temple in Sabae, Fukui.

Photographer: Shiho Fukada/Bloomberg

“We’ve had little success,” said Ryozo Takeuchi, chairman of Takeuchi Optical Co., which has about 80 employees. Only about 30 percent of the local glasses makers gave any summer bonuses this year, said Takeuchi, also president of the Fukui Optical Association.

Inside his two-story plant there is a faint smell of oil as Sachiyo Ono assembles tiny parts with an electric screwdriver. The 46-year-old mother of two lives nearby, next door to her parents-in-law. Like Yamamoto, she’s more worried about another sales tax increase.

“We won’t be able to make ends meet unless my husband and I both work,” she said. “If a big win by the LDP means the sales tax will go up, I don’t want to vote for them. But I can’t count on any other parties either.”

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