Japan Unions Narrowing Pay Gap With U.S.
Acouple of years ago during a visit to Japan, I watched thousands of Japanese union members wildly cheering in a Tokyo stadium as their leaders promised impressive contract gains that year if the workers were willing to fight hard and go on strike if necessary.
The rally was to end with a massive night march down the center of Tokyo. As the militant workers readied for the march, the cheering reached a crescendo and picket signs were waving wildly. Suddenly, one of the speakers shouted to the demonstrators that the police were re-timing the signal lights along the line of march so there would be no unseemly interference with the normal flow of traffic.
The shouting stopped almost instantly, picket signs were lowered and the workers sat down, chatting quietly for about 30 minutes while proper arrangements were completed so that the march could be conducted in an orderly fashion.
The orderly demonstration was the Japanese unions’ way of proving to their bosses and the public that the workers were, indeed, irrevocably committed to fight for--and win--substantial contract gains during what the Japanese call labor’s annual “spring struggle.”
After the rush hour was over, there actually was a strike by some railroad workers for a short period. But, as I watched, I felt that the rally and subsequent march of the thousands of shouting workers was almost ridiculous. Their “militancy” appeared totally dependent on the mood and advice of their leaders--so much so that something as routine as traffic lights could delay what was supposed to be an angry march of protest.
Regardless of the manner in which Japanese unions conduct their strikes, the fact remains that those annual ritualistic “spring struggles” in Japan have apparently been a factor in the dramatic reduction in the once huge differences between the cost of labor in the United States and Japan. And the trend is continuing.
Just last week, I was in Tokyo again, and I watched the Japanese unions open the 1986 battle with an announcement of their decision to demand a shorter work week, increases in wages alone of more than 7% and other contract gains.
This time, however, the unions didn’t seem ridiculous.
While Japanese unions have a reputation for being extraordinarily pliant and cooperative--and they often are--they can be viewed from a different perspective when one recalls that last year, for instance, Japanese steel workers won a hefty annual wage increase of 6.3% in their industry that is operating at only 70% of capacity while steelworkers at Wheeling-Pittsburgh Steel Corp. in this country took a whopping $3.40-an-hour cut in their wages and fringe benefits after a bitter strike.
Overall, U.S. unions are preparing for, at best, some very modest gains, and, in many cases, more wage freezes or even cuts in 1986 as they negotiate new contracts for 3.8 million workers, or about one-fifth of the unionized work force in this country.
But, while there is no guarantee of success, there is certainly no modesty in the contract demands being made for almost all Japanese workers by the General Council of Trade Unions and the Federation of Independent Unions.
Employers in Japan say they will resist the unions. Bumpei Otsuki, chairman of the Japan Federation of Employers’ Assns., said the unions’ demands for the 1986 “struggle” are “out of the question.”
Otsuki said: “Japanese industries have not done all that well this year, and Japan stands at a difficult time right now. The country is just not strong enough to consider that kind of figure (pay hikes in excess of 7%).”
This is quite a contrast to labor negotiations in the United States, where the predominating issues these days are wage freezes and cuts, two-tier wage structures and massive layoffs.
Back in 1960, total compensation for Japanese production workers was only 26 cents an hour, compared to $2.66 for U.S. production workers, according to the Bureau of Labor Statistics. That meant a company could hire 10 Japanese workers for the cost of employing just one American.
Japanese Doing Better
Even though unions in this country were making fairly significant contract gains in the late 1970s and early 1980s, Japanese workers were doing better. By 1980, Japanese production workers were making 57% of the wages and benefits earned by their American counterparts. In other words, a company could not even hire two Japanese, much less 10, for the cost of one American worker.
Precise labor-cost comparisons between the two nations are difficult because of drastic fluctuations in the values of the yen and the dollar and because of different methods of calculating fringe benefits. Nevertheless, the gap between the cost of labor in Japan and the United States is continuing to narrow.
And if the Japanese “spring struggle” in 1986 is even a partial success for the unions, as their leaders predict, that gap is going to narrow even further.
