Market Scene : Japan Seized With Spring Fever--Over Salaries : Each season, 8 million workers bargain with bosses. But they really pull their punches.
The plum blossoms of February have fallen, but the cherry trees of April are not yet in bloom. It’s Shunto season, when Japan’s labor movement performs its annual rite of spring.
During Shunto, literally “spring fight,” labor unions across the country go head-to-head with management in a vocal, nationwide campaign for higher wages and better working conditions.
It was in the mid-1950s that Japan’s unions began bargaining with management during the spring period, figuring that the collective approach would strengthen their position. And thecampaign certainly evokes a militant image. The official poster of the 1992 Shunto depicts a dancer in a fierce-looking mask and warns: “We have decided not to compromise!”
“We must fight with management to defend our standard of living,” said Akira Yamagishi, chairman of the Japanese Trade Union Confederation, speaking before a large gathering of union leaders holding up banners with the names of their unions and this year’s slogans.
The confederation, which represents more than 20,000 unions with 8 million workers, is the central headquarters for the annual labor offensive and has prepared thousands of posters, pamphlets and labor studies to promote the campaign. With labor demanding an 8% increase in wages and management insisting it will hold the line at 2.5%, the two sides appear to be headed for a bruising battle.
But wait! Something strange is going on here. If Yamagishi is pushing for an 8% increase, how come he has already let slip that a settlement at about 5.1%, would be an acceptable minimum for member unions? And how come an official representing Nikkeiren, the employers’ group, has already told reporters that the wage negotiations will end with a settlement of about 5%?
The answer is simple. For all its massive scale, Shunto has become little more than an elaborate, well-orchestrated ritual--a government-influenced rite that helps Japanese corporations compete with the West by suppressing wages.
“Shunto is called a fight, but it is really just a ceremony,” notes Ikuro Takagi, a labor specialist at Japan Women’s University.
A survey of labor leaders and managers conducted by a think tank tied to the Labor Ministry establishes the expectations of each group. It comes out right before negotiations begin and serves as a bench mark for both sides. Labor leaders who might have wanted to push for more don’t feel they can grumble when they are getting what everybody else is expected to get. Employers who might have offered more hold down their increases to be in line with other companies.
“It’s the government’s incomes policy--it’s Japan, Inc.,” says Takagi. This year, for example, the February survey suggests that workers and management alike will be happy to settle on a wage increase of about 5%.
The Japanese system has lately been much more of a boon to employers than employees. “Wages in unionized companies (the largest firms) are actually rising less than wages in non-unionized companies,” says Takagi.
From 1987 to 1990, while corporate profits soared 60%, Japanese wages rose just 11%--a mere 5.3% after inflation. Japanese workers’ share of the nation’s wealth--their wages as a percentage of the country’s gross national product--has fallen to 69.6% from a high of 79.2% in 1975. By contrast, American workers today collect more than 80% of the U.S. economic pie, and Germans get a hefty 88% of theirs.
Although the average Japanese worker earns a respectable $2,300 a month (bonuses included), his purchasing power is poor by the standards of most industrial nations because of high living costs. Studio apartments within commuting distance of Tokyo, for example, are priced at the equivalent of $500,000 and up, and food and gasoline cost more than twice what they do in America.
Embarrassed union leaders blame their failure to win better wage increases on bad timing. During the 1990 Shunto, for example, stock prices were plunging, and management used the market’s fall and widespread anxiety over the economy’s future to argue for low wages increases. Last year, employers took advantage of the Gulf War and threatened oil-price increase to fight higher wages that they claimed would be inflationary.
“Unions listened to management a little too much,” says Hideaki Norikawa, assistant director of the labor confederation’s working conditions department.
Another factor in the lag is that Japanese unions are company-based rather than being organized along trade lines. Union leaders find it difficult to separate their members’ individual interests from those of the company.
“We have a lot of information about the company’s financial performance, so we are able to determine what it is reasonable for the company to pay,” says Kazuhiro Seki, president of the Hitachi Workers Union and a 20-year union member. “We don’t want the company to have to lose money and force people into retirement.”
Since Hitachi’s income is likely to show a sharp decline in the year that ends March 31, “management won’t agree to much of an increase,” says Seki.
Reluctant to put their companies at a competitive disadvantage, unions are also resorting less and less to strikes. Last year, Japan lost just 140,000 work days to strikes, down from 7.8 million days lost in 1973.
Instead of the hard-nosed bargaining sessions typical of Western labor activists, Japanese labor talks are formal, with as many as 200 union members sitting in a large room to watch their leaders face management across the table. However, Seki of Hitachi says real negotiations take place in smaller sessions. Although union leaders deny it, analysts maintain that once out of the view of their members, union leaders actually help management to determine the minimum wage level acceptable to workers without damaging morale.
Japanese unions weren’t always so weak. In the 1920s, they were as radical as their Western counterparts, mounting crippling strikes to force employers to agree to large wage increases.
To keep unions out and to prevent skilled workers from jumping to other companies, Japan’s larger companies began the system of seniority and lifetime employment for which their country became famous. They also developed worker committees. These committees were the precursors of today’s company unions.
Then came the custom of Shunto, which, throughout the 1960s and early 1970s grew ever larger and brought double-digit wage increases to Japanese workers. After the 1974 oil crisis, however, companies were suddenly in trouble, and unions backed off.
“The key issue then was how many employees the companies would hold onto,” says Norikawa of the Confederation. “To get them to keep workers, we decided not to demand high wages.”
Although Japanese companies had recovered by the early 1980s and were beginning to pile up profits again, unions never regained their strength. Union membership, which totaled 50% of the country’s work force three decades ago, has declined steadily. Now, only about one in four workers belongs to a union.
Some analysts argue that a national labor shortage and an increasingly mobile labor force is making the old lifetime employment system an anachronism and setting the stage for change.
Some managers are also beginning to see a need for change. Akio Morita, chairman of Sony Corp., recently called on Japanese companies to reduce workers’ hours and raise the percentage of their revenues distributed to workers in order to reduce friction with trade partners.
But for all such talk, few see Japanese labor making significant gains.
“Everybody knows intellectually that work hours have to be reduced and wages increased, but actually implementing that is different,” says Ichiro Shioji, a labor consultant and former chairman of the Japan Automobile Workers Union.
The first management responses to labor demands during this Shunto will come March 25. If history is any indication, unions will quietly accept what management offers and put away their banners and poster until next spring.
Rising Wages, Falling Share
Average annual manufacturing wages for companies with over 30 employees
1970: $5,712
‘75: $13,096
‘80: $19,568
‘85: $23,960
‘90: $28,160
Source: Japanese Trade Union Confederation, Japan Producivity Center
