Japanese Firms in State Pay Less, Study Asserts


Most jobs at Japanese-owned companies in California are low-skill, low-wage positions that don't pay workers enough to support their families, according to a recently published UCLA study.

But Japanese executives in the United States disputed the study Thursday, saying that its data is old and that its conclusions are based on prejudice, not fact.

After reviewing more than 60 manufacturers, UCLA sociologist Ruth Milkman found that the companies--most of which are not unionized and rely on an immigrant labor pool--paid their workers about $2 an hour less than the $11-an-hour average manufacturing salary in the state.

Lower wages benefit businesses but will contribute to the nation's economic decline, Milkman said. They reduce workers' purchasing power and will hurt the economy in the long run.

"There is an ironic combination of foreign capital and immigrant labor to produce goods in the U.S.A.," Milkman said in an interview. "This is important because the major motivation for location (here) is to ward off protectionism. If (goods) are made here, they don't have to worry about import restrictions."

Noting that Milkman completed her research in 1989, Japanese executives said that it is no longer valid because company procedures change daily.

Tachi Kiuchi, president of the Japanese Business Assn., is one of those who disagrees with the study, which he said will be "ignored" by his association.

As head of Mitsubishi Electronics Inc., in Santa Ana, Kiuchi says the study is a manifestation of American racism toward the Japanese.

"Two years is too long ago because every day we are making improvements," he said. "This is all prejudice because the general concern is that we pay our employees too much."

Milkman originally planned her research to focus on the management success of New United Motor Manufacturing Inc., an acclaimed joint venture between General Motors and Toyota in Fremont, Calif.

She interviewed 66 manufacturing companies, including three auto parts suppliers as well as manufacturers of electronics, steel, health products and food. The study's release comes at a delicate time. U.S.-Japan relations are shaky after President Bush's recent trade mission to Japan.

A round of name-calling between the nations--capped by Japanese allegations of American laziness--has made headlines for weeks. And the U.S. economy is in the spotlight as presidential candidates jockey for votes.

Rather than inciting another round of Japan-bashing, trade specialists say the study will have a positive impact by forcing the U.S. government as well as the American public to take a closer look at industrial practices in both Japanese and American firms.

"The report is not an article on Japan-bashing; it's one of American-bashing," said Chalmers Johnson, a UC San Diego economist. "Our own incompetence is to be blamed."

To Johnson, the study points out this country's need for a way to monitor direct foreign investment. "This is the way all such business is done in Japan," he said. "We couldn't do anything without going through a licensing procedure."

Still, Milkman's study "points out that there is a real gap between our perception of what Japanese firms do and how most Japanese companies actually operate in the United States," said Harley Shaiken, a visiting scholar at the Institute for Industrial Relations at UC Berkeley. "We have a very idealized perception . . . when in fact most Japanese firms in California operate more along the lines of U.S. firms, picking up some of the firms' worst practices along the way."

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