Financial Crisis Hits Brazilians in Japan

Foreign contract workers in Japan have been hit by the economic downturn.

HAMAMATSU, Japan, Nov. 28, 2008 -- After almost 12 years in Japan, Isac Freitas never imagined he would see a day where he would be lining up at a job placement agency.

"My employer told me about two weeks ago Nov. 28th would be my last day of work," said Freitas, a 38-year-old native of Brazil. Freitas said he worked for an auto parts company making transmissions in the city of Hamamatsu in Shizuoka Prefecture, 165 miles southwest of Tokyo. The city is home to auto parts and assembly plants such as Suzuki Motor Corp. "I worked for the same company for more than eleven years and all I got was a verbal notice of termination."

Freitas is one of many foreign contract workers serving in Japan's manufacturing sector who recently have been hit by the sudden economic downturn. As major manufacturers such as Toyota, Suzuki and Yamaha cut their production due to grim worldwide sales, those companies, subsidiaries and parts makers have also started to cut contract workers. Japanese dailies reported Toyota is planning to slash 3,000 of 6,000 contract workers by March, 2009. Suzuki Motor Corp, which runs plants from auto parts to final assembly in Hamamatsu City, also plans to let go of 600 contract workers.

"Even among contract workers, foreigners are often the first to be let go," said Kazushige Mori, the Director General of the Japan-Brazil Central Association. "Many find it hard to find another job and I hear many flights to Brazil are all sold out through the end of the year. Things do not look good."

The Japanese government does not keep track of displaced foreign workers but local job agencies are facing changes in the workforce. "We have been getting more inquiries than we can ever handle," said Akihiko Sugiyama, the chief of the foreign worker section at Hello Work Hamamtsu, a government-run job center. "The number of visitors to our agency has been increasing steadily each month this year but we are seeing a lot more people in the past few months – many of them are Brazilians."

Sugiyama said the agency's five staff members have literally been working overtime to assist foreign workers who have been displaced. "The number of visitors went up at least by 50 percent compared to the beginning of this year. This is unprecedented," Sugiyama said.

The influx of Brazilians to Japan started in the early '90s. In response to a domestic labor shortage, the Japanese government revised the immigration law in 1990, easing the entry of Brazilians of Japanese descent and their families. The number of foreign residents in Japan is at a record high at roughly 2,150,000, or 1.7 percent of the Japanese population.

More than 310,000 Brazilians live across Japan today, making them third largest foreign resident group, trailing Chinese and Koreans. Brazilians started to form their own communities called "Little Brazils." Hamamatsu is one of them, with more than 20,000 Brazilian residents making up almost 3 percent of the city's population.

"We had many Brazilians moving to Japan in the early '90s and many went home after the burst of the so called bubble economy in Japan," said Mori. "Back then, many people came to Japan with the intention of spending a few years and taking money back home. Nowadays people come here hoping to make Japan their place of residence. They want to settle here."

In fact, Brazilians have started to take home mortgages and purchase houses in Hamamatsu City in recent years. Freitas, who is about to lose his job, is one such home owner. He fears he will not be able to make the monthly payment of roughly $1,000. "I took a 35-year mortgage and my three-story house was just completed this month," said Freitas, "I have a wife and a one-year-old son. I really need a job right now but I do not see much of anything available."

The recent economic indicators of the world's second largest economy do not look promising to these workers. The Japanese government announced this month that the country's economy shrank another 0.1 percent in the third quarter, following a 0.9 percent dip in the second quarter. This means the country's economy has entered recession for the first time since 2002.

Japan's exports fell by more than 7 percent last month. That makes foreign workers such as Freitas more vulnerable, since many of them are in the export-reliant manufacturing sector. "Since most of them are not fluent in Japanese, they are looking for another job in the same sector, namely manufacturing" said Sugiyama. "But that is the sector hardest hit by the recent economic dip. This is a vicious circle."

"What makes leaving Japan hard for many Brazilians, in addition to the economic reason, is their children," said Yoshiki Takayanagi, director of Hamamatsu Foundation for International Communications and Exchanges. "Many children were born and raised in Japan and they often speak Japanese better than Portuguese. A transition to Brazil would be extremely difficult for those children."

Children are the reason 51-year-old Haruo Toyoda showed up at Hello Work Hamamatsu looking for a job. "I have three children and my youngest is only eleven. I want to send her to school here but without a job, it is just impossible," said Toyoda, a Japanese Brazilian who lost his job as a driver in September. "I used to drive those contract workers to factories but since they are getting rid of those workers, they do not need me anymore. I managed to find odd jobs in between contract jobs in the past, but there is absolutely nothing this time." Toyoda kept sitting in the agency's waiting room quietly for more than an hour along with other Brazilians with the number ticket in his hand.

João Toshiei Masuko is the President of an imported goods store, Servitu, which caters to the Brazilian community. He said the Brazilian community will have to survive this economic storm just like it did in the '90s.

"People have been spending less at my store since this spring," said Masuko, who has lived and worked in Hamamatsu for 20 years. "Our sales have dropped probably by 10-20 percent. I have people asking for a job every single day. The current state of the economy makes living here difficult, but returning to Brazil can be even harder. We are not just visiting, we have settled here."