Japanese Employers, Labor in Rare Alliance to Combat High Prices

Japan’s leading employers association and its largest labor confederation, usually at loggerheads, have united in an unprecedented joint struggle against this country’s high consumer prices and high cost of land.

In the first round of the effort, the two groups--Nikkeiren, the Japan Federation of Employers’ Assns., and Rengo, the Private Sector Trade Union Confederation--announced the results of a joint survey of consumer prices in Tokyo, New York and Frankfurt.

The results were not surprising. Of the 22 food and clothing items surveyed, 19 cost more in Tokyo than in Frankfurt, where the West German mark, like the Japanese yen, has soared against the dollar since September, 1985. And all 22 cost more in Tokyo than in New York.

Takeo Naruse, Nikkeiren’s assistant director general, said the employers association is campaigning against inflation “as public enemy No. 1.” Rengo, a new federation scheduled to bring under its wing all private company unions in Japan, has undertaken a campaign demanding not merely higher wages but an overall improvement in the standard of living.

“So although we will go our own ways during shunto (the spring struggle for higher wages), we decided to wage a joint struggle on land prices and the cost of living,” Naruse said.

The two groups issued the comparison of prices in the three cities, he said, as an interim report pending compilation of comprehensive recommendations on consumer and land prices they plan to submit to the government later this year.

Food prices, which ranged from 1.3 times to 8.9 times prices in New York, will be emphasized, Naruse said. Clothing costs, which ranged from 1.3 to 4.1 times New York prices, “weren’t so expensive,” he said.

$22.34 a Pound for Beef

Of 14 food items surveyed, only codfish, selling at $5.21 a pound in Tokyo, was less than double the price in New York, the survey showed. Beef roast was selling here at $22.34 a pound, while sirloin in New York was going for $3.99 a pound. A 15-gram jar of instant coffee, at $7.13 in Tokyo, was 3.9 times the price in New York, $1.85.

Rice, at $36.72 for a 10-kilogram (22-pound) bag, was six times higher than in New York ($6.15) but less expensive than in Frankfurt ($39.09).

“We had to take the price Japanese living in Frankfurt pay for rice they import,” Naruse said.

T-shirts, at $4.82 here compared to $3.66 in New York and $7.70 in Frankfurt, rated as the best bargain for Japanese consumers in clothing. Prices of other items were four times the New York levels, and higher (4.1 times higher for women’s skirts, for example).

Land is expected to hold much of the two groups’ attention in the final report they will submit to the government, Naruse said.

“Prices of homes and condominiums in urban areas have risen so much that the only people who can afford to buy property are those who are selling property,” he said.

$1.1 Million for Condos

Coincidentally, the Japan High-Rise Housing Assn., which represents apartment builders, announced that new condominiums being offered on the market this fiscal year in Tokyo are selling for an average price of 145 million yen ($1.1 million), or 2.9 times last year’s average of 49,360,000 yen ($379,692).

The 1988 national average for a condominium, the association said, was 39,330,000 yen ($302,538), up 24.9% from last year.

In the Tokyo metropolitan area, 33,412 new condominium units will go on sale this year, but only 7,710 are in Tokyo itself. Of those, 47 are selling at 1 billion yen ($7.7 million) or more.

The national average for condominium space is 69 square meters (742 square feet), which is 1.2 square meters (13 square feet) larger than last year, the association said.

Yo Takeuchi, a Finance Ministry official on special assignment to the Administrative Management Agency, said: “the younger generation in Japan has no hope of buying a home. Japanese can buy jewelry priced at $1,000, take trips to Hawaii and live in a style that looks like a young investment broker in New York,” Takeuchi said. “But if you look at their total life, it’s about the same standard as Singapore.”

Takeuchi’s reference to jewelry was understated.

A flyer inserted in newspapers delivered recently to homes in a middle-class neighborhood of central Tokyo advertised a gold Rolex watch for nearly the price of a Hyundai car in the United States ($5,038) and diamond rings for more than the price of most American houses ($300,000).

“It’s not just a problem of the high cost of living,” Naruse said. “It’s also a preference for high living.”

Ron Napier of the Salomon Bros. investment firm said Japanese and American wages work out to about the same level at an exchange rate of 126 yen to the dollar, “but to get the same living standards, you have to have an exchange rate of 209 yen to the dollar.”

In trading on the New York foreign exchange market Tuesday, the dollar fell to 134.33 yen from 135.40 yen on Friday.