The Multinational Monitor

November 1988 - VOLUME 9 - NUMBER 11



By Harriet Oaks
WHEN MAZDA DECIDED to locate its first U.S. auto plant in the town of Flat Rock, Michigan, it had to fight criticism from other Japanese auto producers that locating in UAW territory would produce future labor problems. The bulk of the Japanese plants, in places like Tennessee and Kentucky, are far from UAW strongholds.

But the UAW has been more than supportive of both the Mazda plant and the labor changes that Mazda has pioneered in Flat Rock, says the company. "We found the UAW leadership quite enlightened about the need to change the confrontational atmosphere that had characterized their relationship with the other auto companies,"

Osaum Nobuto, president of the U.S. Mazda Motor Manufacturing Corporation, wrote in the Keidanren Review earlier this year. "The cooperative relationship we have established with the UAW has gained particular notice in Detroit." Although Japanese companies are anxious to see their unique management style implemented in overseas operations, workers have only to look at their Japanese counterparts to see the folly of blindly accepting the Japanese model.

In Japan, the much vaunted Japanese labor-management cooperative spirit has meant significant sacrifices that Japanese workers have had to accept vis-a-vis their western counterparts. Japanese workers have failed to achieve labor rights that are standard fare throughout the developed world. The eight hour day is not the rule for most workers in Japan. Sick leave has yet to be written into law. Only a few industries, most notably banking and finance corporations, are talking of making the five-day work week a reality before 1990. The work week was only recently decreased from 48 to 46 hours, but many businesses were given exemptions.

According to the Ministry of Labor, in 1986 Japanese workers worked 2,150 hours, while U.S. workers worked only 1,924 hours. Nearly 14 percent of all Japanese workers needed an hour or more to commute to and from work, compared to only 6 percent in the United States. Social security for Japan's elderly comes through saving and working. In fact, the Japanese worker--despite tremendous gains in the Japanese economy in the last several years--has seen few benefits. The living standard for Japanese workers is much lower than the living standard for U.S. workers even though per capita income is almost equal.

Working Hours
Working hours are perhaps the most controversial issue in Japan. In April, the government introduced an amendment to the Labor Standards Law proposing a 40 hour work week, but the bill "would allow employers to retain the present "48-hour week" or even a 54-hour week for three more years "in accordance with the scale and category of their business," according to the Concerned Labor of Japan Committee. No exact timetable was written into the proposed law for conversion to the 40-hour work week. And the bill gave employers tremendous flexibility in deciding when employees had to work these hours and days. The bill that was finally passed by the Diet set a 46-hour work week goal but allows employers to keep operating under the present 48-hour work week for another three years. It did, however, put caps on how flexible employers could be if they chose to operate under the flex-time provision: "working hours should not be extended more than 10 hours a day or 52 hours a week and one day-off should be given every week." While intervals "between days-off should not be longer than 12 days." By allowing employers to require workers to work longer during busy times and then cutting them back during slack times, the government hopes to cut the number of overtime hours clocked and make shorter hours less arduous for employers.

Another clause added to the Labor Standards Law required that a "reduction of wages or other disadvantages should not be given to those who take annual paid leave in full." According to the Ministry of Labor only a little over half of all paid vacations are actually taken. Under the new law, the minimum number of paid leave days was increased from 6 to 10, but an employee can only take five days of paid leave at a time he or she picks; other paid leave must be approved by the employer. Although the changes in the law were an attempt to deal with both domestic and international concerns that Japan's workers are overworked, it offers little real improvement in working conditions. The new law "meets none of the international labor standards concerning working hours stipulated by the International Labor Organization (ILO) and spreads unfair working conditions among peoples," notes the Concerned Labor of Japan Committee.

Japanese Unions
Much of the problem with the Japanese labor movement stems from the way Japanese labor unions were established in post World War II Japan. Japanese labor unions, unlike those in the United States and Europe, are company specific, not industry wide. What this usually means, says Hiroshi Wakabayashi, director of the International Labor Movement Institute in Tokyo, is that the union works with the company to improve profitability. And if that means lower wages and longer working hours, the union often willingly complies. "The labor union of Japan is not the union of workers but the union of employers," says Wakabayashi.

Ten years ago, he says, the unions were more genuinely on the side of the workers. The change in union outlook is reflected in union membership--27.6 percent of workers were unionized in 1987 compared to 34.4 percent in 1975. "Workers belonging to the enterprise feel they are a component to management," says Ryu Kazama professor of economics at Kantogakuin University in Yokohama City. The Japanese economy, he says, is dependent on these loyal workers and their willingness to accept lower living standards. At the annual spring offensive, the Japanese labor movement's bargaining campaign, unions settled for a 4.4 percent increase in wages for the year. A fairly dismal showing, especially since it followed a 1987 increase of only 3.5 percent--the lowest increase in three decades.

Rengo, the largest trade union organization, even began calling the traditional "spring struggle" the "spring discussion" to better reflect the movement's new-found identity. The two-year old Rengo was lauded by The Japan Times for its willingness to recognize political realities. "Free from the yoke of leftist ideology and a strongly political orientation, Rengo has declared itself to be a national labor organization basically in the same boat as management."

The union did demand wage increases in the spring offensive but the demands of 6 to 7 percent were far from what was needed to give Japanese workers parity with workers in the West according to Toitsu Rosokon, a new, radical labor organization. Toitsu Roso-kon is highly critical of Rengo and its plans to reshape the Japanese labor movement.

In 1990 Sohyo, the General Council of Trade Unions of Japan, will disband and join with Rengo. Sohyo, with over 4 million members mostly in the public sector, will make Rengo a tremendously powerful force. So far, however, maintenance of the status quo seems to be Rengo's driving force. Akira Haruyama, secretary general of Toitu Roso-kon, says his 1.8 million strong organization is calling on workers throughout Japan to "oppose the right wing reorganization of the labor movement." Rengo, which already has over 5 million of the 12 million unionized workers under its umbrella, was founded after two other national labor organizations--Domei and Churitsu Roren-- were dissolved. Haruyama says Rengo follows the Domei line: antiworker. "[Rengol is turning [its] back on the working people," he says.

As the Japanese economy has catapulted, Rengo and its predecessors have cautioned workers that competition is severe and that they must wait for increases in wages and benefits, he says. "The wage levels of Japanese workers are ranked 20th," he says. "If we compare purchasing power, the Japanese purchasing power is only 54 percent of U.S. workers." Haruyama says the growing disparity in the growth in the wages of Japanese workers and the growth in the Japanese economy is beginning to force workers to question company motives.

Harriet Oaks is a freelance writer based in Boston.