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Features The Yakuza Landscape Today
Hard-Up Yakuza Struggle to Earn a Living

Splits in the Yamaguchi-gumi, Japan’s most powerful criminal organization, hint at tough economic times for the yakuza. Government crackdowns have dramatically reduced gangster income, dragging the group down from its once dominant position.

These are hard times for Japan’s yakuza. Successive splits have divided the strength of the powerful Yamaguchi-gumi criminal gang. In the initial rupture of August 2015, a Kobe faction broke away. Then this group itself fragmented in April 2017, leaving three organizations: the Yamaguchi-gumi, Kobe Yamaguchi-gumi, and Ninkyō Yamaguchi-gumi.

The primary reason for the splits is that gang members now struggle to make a living. At one time, wearing the Yamaguchi-gumi crest and leading a group of young men ready to put their lives on the line was a path to achieving the “gangster dream.” Yakuza members who have completed a drinking ritual with the organization boss are known as jikisan and are considered directly subordinate to him. These jikisan once had riches to spend on houses, cars, and women. However, recent amendments to legislation and nationwide ordinances targeting organized crime have tightened the screws to the point where yakuza cannot make ends meet.

Yamaguchi-gumi membership fees amount to ¥850,000 per month. Rebelling against this financial burden and rigid control by the gang leadership, the Kobe faction—centered on Inoue Kunio, leader of the Yamaken-gumi, the organization’s largest group—went independent, setting fees for its jikisan at less than ¥300,000. When this loss of revenues from the broader membership pressed the new group to demand higher payments from members of its central Yamaken-gumi faction, their brewing discontent led to the formation of the breakaway Ninkyō Yamaguchi-gumi.

Past Riches a Distant Dream

Yakuza income has become severely constrained. Tougher legislation has made it difficult for gangs to earn money from lawful business, so they must now rely primarily on their illegal activities. The main areas are drugs and telephone scams. In the Yamaguchi-gumi, dealing drugs is ostensibly taboo, but the gang turns a blind eye to endeavors by individual members. Although the trade is highly risky, to some extent the group’s survival depends on the high returns gained from methamphetamine sales. Scamming elderly members of the public also falls considerably short of the image of chivalry that the yakuza like to project, but the business continues regardless.

There are still some legitimate fields, like real estate and finance, that provide room for the gangs’ dirty work. It can be useful for businesses trying to navigate complex property rights issues, for instance, to have a muscle backing. Jobs like this remain in Tokyo in particular. Criminal organizations can also profit from trading when a listed company hits an economic slump. Meanwhile, new areas like online peer-to-peer lending and cryptocurrency are prime environments for yakuza fraud.

However, this kind of business is just a tenth or a twentieth of the scale it was in Japanese crime’s bubble-era heyday.

Around 1990, when Japan’s economic bubble was at its height, senior members of criminal gangs secured more easy money than anyone. Yamaguchi-gumi jikisan were said to have assets of several billion yen, and deputies to the wakagashira (underboss) over ¥10 billion. Watanabe Yoshinori, the gang’s chief at the time, and wakagashira Takumi Masaru were believed to have assets worth tens of billions of yen. As the money was not taxed, this cannot be proved directly, but flashy yakuza spending on lavish entertainment in Kitashinchi, Osaka, and Ginza, Tokyo, tells its own story. It was an entirely different era.

Driven Out of Public Life

The reason for the change is clear. Until the bubble era, yakuza groups made money both legally and illegally, but the government’s tightened restrictions and beefed-up compliance have frozen gangs out of corporate earnings. Now they must rely primarily on illicit business.

Typical legal business fields for yakuza involvement included finance, real estate, construction, entertainment, staffing, demolition, industrial waste, liquidation of companies, debt collection, and settling disputes within their territory. Illegal areas included gambling, drugs, prostitution, telephone fraud, protection rackets, and impersonating lawyers.

If they relied only on legal business, gangs would be much like ordinary companies, but it was hard to walk away from the boosted earnings made possible by a combination of activities inside and outside the law. Affiliated financial operatives could ignore legal upper limits on interest rates and make highly risky loans to companies in the certain knowledge that they would get their money back.

At the time, some viewed the yakuza as a necessary evil to some extent, performing activities that were of some value to legitimate society. In the financial sphere, for example, they could supply money at short notice when it was really needed, while in the real estate industry they were able to acquire land by all available means within a given time limit. They could deliver workers for dangerous jobs and ensure that debts could be recovered even when the claimant was competing with other creditors. They were generally tolerated, at least until the first of several antigang laws came into force in 1992.

  • [2017.11.08]
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