Writings of Kazuo Nimura
Labour Relations in Japan:1940 - 1993
Until only ten to twenty years ago, most Japanese felt that their country was behind the times in international terms. As a late developer, Japan looked to foreign models in all sorts of fields and sought to catch up with more advanced countries. In the area of labour relations, employers, bureaucrats and trade unionists looked for models to America, Germany, Britain or the Soviet Union. But from the late 1970s, the situation changed and increasingly people began to look to Japan for labour relations models. A great number of papers and books appeared on the theme of Japanisation, or on something that was held to be virtually identical with it - flexibility. Certainly it testifies only too well to the pace of change in Japan that, whereas most Japanese once felt that Japan was behind the times, they now feel that it is one of the most advanced nations, at least in the field of economy.
The modern history of Japan as a whole has been one of prodigious change, and after the Second World War the pace of change was at its most frenetic. The Japan of the 1940s was in all aspects - politically, economically, socially and culturally - a different country from the Japan of today. A glance at union membership figures, one of the main indicators of labour relations, shows that in the early 1940s membership was zero, all unions having been disbanded, yet in 1992 membership stood at 12,541,000. In qualitative terms, the changes were also enormous. The union movement of the late 1940s and 1950s was confrontational to a degree unimaginable when measured by the standard of today's labour-management cooperation.
It is impossible to present the full complexity of the scope of such dynamic transformation in this short chapter. I shall therefore deal with this fifty-year period in four stages, describing the broader changes in Japanese labour relations, their characteristics and historical background. My tentative conclusion is that there are two main reasons why Japanese labour relations have differed from those of the West, in which I include Australia. The first is that Japan has lacked a tradition of craft unionism, and the Japanese artisans' guilds of pre-modern times had little sense of autonomy. Secondly, Japanese blue-collar workers felt no particular pride in being members of the working class and constantly sought to escape working-class status. That they were able to succeed in this was due to the democratisation policies of the post-war Occupation which enabled them to demand equal treatment with white-collar workers.
The war years, 1940 - 45
The dissolution of trade unions and the Sanpo (industrial patriotic) movement
In July 1940, Japan's largest national labour organisation, Sōdōmei (Japan General Federation of Labour) reluctantly resolved to disband itself. This was followed by the forced dissolution even of ultra-right-wing unions, which had been at the forefront of the industrial patriotic movement and advocates of the 'Nipponism' labour movement. All unions were thus disbanded and merged into the Sangyō Hokoku Renmei ( Industrial Patriotic Federation). The Federation was soon superseded by the Sangyō Hokoku Kai ( Industrial Patriotic Association), an official government organisation under the jurisdiction of the Welfare Ministry.
The aim of the sanpō undō (industrial patriotic movement) was to ensure that workers cooperated with the war effort. But the origins of the Sanpō Renmei (Industrial Patriotic Federation), which was organised by the semi-governmental organisation Kyōchōkai (Harmonisation Society), lay in the bureaucrats' and management's intention to prevent any labour upsurge after the war. Drawing on their experience of labour unrest at the end of the First World War, and determined to prevent a similar scenario, Interior Ministry officials thought up the idea of the Sanpō Renmei. It was believed that, during wartime, when the nation's attention was fixed on the performance of the armed forces, it was relatively easy to suppress workers' demands, but that there was a danger of these flaring up again after the war was over. To prevent this from happening, it was thought necessary to thoroughly uproot all traces of autonomous labour organisations during wartime. As we will see later, the relative effectiveness of the government's policy is shown by the fact that there was a period of nearly two months immediately after the end of the war when there was virtually no labour movement.
Each plant was reorganised as a branch of the Sanpō Association headed by a president or factory director, and the workers were thus mobilised for the war effort. Indeed, the Sanpō not only brought about the break-up of autonomous labour unions, but it also introduced measures to ease the frustrations which Japanese workers had harboured for decades. For example, it emphasised that blue-collar workers, who until then had been referred to as rōdōsha (labourers) or koin (factory hands), were just as essential as producers for the Greater Empire of Japan as managers and white-collar workers, and were thus redesignated as sangyō senshi (industrial warriors). In such ways, labour policy during the war years was more inclined toward providing a spiritual palliative than it was in improving workers' material welfare. Nevertheless, it must be said that these measures were by no means meaningless or ineffective; they were to a degree successful in stimulating workers' spirit and motivation. As will be seen later, their effects were clearly reflected in the post-war trade union movement.
At the same time, the government took various steps to boost productivity and stabilise labour relations. In order to guarantee the labour power necessary to meet military demands, one piece of legislation after another was passed to restrict workers' job changes, to draft men to work in factories, and to organise students in higher education into various groups that could serve the war effort. The most significant impact of these measures on post-war labour relations was the way in which the government actively intervened to determine wage levels. Government bureaucrats fiercely criticised wage payments by the hour as un-Japanese and sought to replace them with the concept of the seikatsukyū (livelihood wage), a minimum wage that would guarantee the livelihood of workers' families. This meant doing away with hourly or day rates in favour of age-related wages and benefits paid in accordance with the size of the family. The concept of the livelihood wage was accepted by companies and supported by workers. It will be seen later that the adoption of a monthly wage payment system for blue-collar workers in the post-war period can be traced to the weakening, during the war years, of the notion of payment for a fixed amount of work.
The post-war period 1945-55
The rapid growth of the labour union movement
The various reforms carried out by the Occupation authorities changed labour relations in Japan considerably from what they had been before the war. Japan's first Trade Union Law was passed, under which the existence of trade unions was legally recognised. A Labour Standards Law and a Labour Relations Adjustment Law were also enacted at this time. The Trade Union Law provided for the establishment of central and local Labour Relations Commissions, independent of central governmental bodies, which were to arbitrate and mediate in cases of industrial disputes. Each of these commissions was made up of representatives from labour, management, and impartial third parties. The commissions gave labour unions a public space in which they could make their views known to labour administration authorities. A new labour ministry was also established as the government body with overall responsibility for labour relations. The legal framework for labour relations thus created was strongly influenced by American and European models, but the actual practice of labour relations in Japan since then has been markedly different.
In the period immediately after Japan's defeat, those who had experienced the labour movement in the pre-war years set to work to rebuild it. Yet the first post-war union did not appear until October, nearly two months after the surrender. Ex-union leaders and socialists, who had been repressed for so long, could not immediately find the courage to restart their activities openly. Also, the experience of defeat was a new one; people felt bewildered and waited to see how the Occupation forces would act. The largest of the pre-war unions, the Seamen's Union, was the first to reform and organise publicly after it was learned that the formation of unions had been allowed in occupied Germany. The seamen were followed by municipal tram workers, who had had a comparatively solid organisation in the 1930s, and by coal and metalminers, large numbers of whom were concentrated in particular areas. Following stories on employers' responsibility for the war and on their wartime activities, newspaper workers throughout the country began to organise their own unions, which in turn had a great effect on workers in other industries. By the end of 1945, nearly 600,000 workers were organised in 843 unions. This was only the beginning of what was to become a tidal wave. By the end of the following year, there were 4,400,000 union members; in June 1947, 5,700,000, and in June 1948, 6,700,000 (53 per cent of the total workforce). Union organisation was especially vigorous in the first half of 1946 when the monthly average was 500,000 new members. 1,100,000 enrolments were recorded in the peak month of March that year.
Two national labour organisations emerged in August 1946. Sōdōmei (Japan General Federation of Labour), with 850,000 members, was reformed under the leadership of socialist activists who had been engaged in the pre-war labour union movement, while the more left-wing Sanbetsu-Kaigi (Congress of Industrial Unions), with 1,630,000 members, was an alliance of twenty-one industry-wide union federations mainly in the media and mining. With its dynamic campaigning, it quickly became the vanguard of the post-war labour movement. While Sōdōmei was the basis of support for the Japan Socialist Party, most of the leadership of Sanbetsu-Kaigi were either members of, or else sympathisers with, the Japan Communist Party, and followed the lead set by that party.
Meanwhile, the Occupation authorities refused to allow the formation of strong nation-wide employers' organisations, fearing that they would prevent the growth of the labour movement. Employers' groups therefore began to form on local or intra-industry lines. A liaison organisation was set up in 1947, and in the following year, with the formation of the Nikkeiren (Japan Federation of Employers' Associations), a national employers' organisation finally emerged which was intended to take on the labour movement.
Why did so many workers rush to join unions in such a short space of time? Various factors were involved, but the main one was political. The new ruler of Japan, the Occupation authorities, had decided on a policy of encouraging and promoting the growth of trade unions. The wartime allies felt that labour unions would act as a break on any tendencies in Japan to return to militarism and therefore adopted the objective of promoting the growth of unions. Furthermore, many of the General Head Quarters Labor Division staff who were responsible for implementing the policy were themselves former labour activists, and went on tours of Japanese factories and mines promoting the formation of unions. That this political factor lies behind the rapid growth of the post-war Japanese labour movement is borne out by the fact that on 10 October 1945, GHQ directed the Japanese government to promote labour unions. The government responded with the Trade Union Law, which was passed by the Diet in December 1945 and became law in March the following year. It will be remembered that the formation of labour unions began in October 1945, rapidly accelerated in December, and reached a peak in March 1946.
However, there were also social factors at work in the rapid unionisation of so many workers in this period. Unionisation did not proceed in an ordinary way, that is, by persuading individual workers to join; rather, almost the entire company workforce would join together en masse to form a new union. In that sense, apart from the few who were actively engaged in leading the process, the majority of workers did not join as a result of a freely made individual decision, but rather, simply 'followed the crowd'. In any society, those who take a stance different from others in their group come under pressure, but in Japan the emphasis on conforming with one's peers is particularly strong. Given such a situation, it would naturally have been hard for those who had little interest in unions or who in some cases opposed joining to have refused to join when most of their peers seemed to be moving towards forming a union. This was one of the reasons why a remarkable number of workers were unionised in such a short period of time.
This social atmosphere was felt throughout the whole society and not just in individual companies. When other workplaces and companies were forming unions, both workers and managers in remaining non-unionised workplaces were inevitably affected. To hang back would be to 'miss the unionisation boat', to be left behind by the rest of society. Above all, when it became clear that GHQ, the highest authority in the land, was seeking to promote unionisation, employers, who had for decades been opposed to legalisation of labour unions, were forced to realise that their position was untenable and began actively to promote the kind of unions that they themselves could control.
Characteristics of post-war Japanese labour relations
The key characteristics of Japanese labour relations from 1945 to the present emerged in the post-war years. Of these, the most notable is the extremely small number of occupational-based unions or industrial unions as against the vast majority of plant unions or enterprise unions. Industrial unions were formed, but they were only loose federations which were unable to exercise much effective leadership for their member unions. National umbrella organisations linking these federations were also formed, but the management of their member unions - decision-making powers as to personnel appointments, finances and union policy - was left to the individual unions themselves.
The second major characteristic is the fact that the membership of most unions include not only blue-collar workers, but supervisory and managerial staff-in fact virtually the entire workforce. There have been not a few examples where literally everyone except the factory manager belongs to the union. Before the Second World War, there were no unions in Japan to which both blue- and white-collar workers belonged, and there have been very few examples of such unions in other countries at any time.
It has not been a matter of white-collar staff simply joining unions. Rather, in the process of the formation of a union, employees at the level of section or department head would be appointed to important union posts, such as chairman or secretary, where they were in a position to exercise control over the union's affairs and direction. It might seem from this that post-war Japanese unions have been little more than tools of management, but in fact many unions of this type have fought hard for substantial wage rises and for democratisation of management.
In the period immediately after the end of the war, a great many blue-collar-only or mostly blue-collar unions were formed, notably in the mining and shipbuilding industries, as well as in municipal transport. These industries all consisted of large-scale plants with mostly male blue-collar workforces in which there were still a number of union activists left over from the pre-war era. But even here, where blue- and white-collar employees started out as members of different unions, after a few years they invariably got together in a single plant union. The exception was the mining industry, where blue- and white-collar workers continued to stay apart in their own unions. Again, in fields where white-collar workers were in the majority, white-collar-only unions were formed. This was especially the case in the tertiary sector, such as education, finance and the civil service, and in fact union density in this sector is higher than that in blue-collar-centred industries.
An important and unique feature of Japanese labour-management relations in the post-war period has been the fact that managements have frequently provided their unions with various facilities, such as the use of company property and buildings, free of charge, or the opportunity to have one's union dues automatically docked from one's pay (the 'check-off ' system). This was already the case in the period under discussion. Many full-time union officials were allowed to go about their union duties, while receiving a full salary, without doing any work for the company, and it was quite acceptable for union meetings to be held during working hours.
The reason for the emergence of plant unions and joint 'blue- and white collar' unions
Why were most post-war unions of the single factory or workplace type and not in the form of craft or industrial unions? Various factors play into this, but the most important are the constraints of the situation in the early post-war years when most unions were formed. On the way, the state had abolished unions altogether, so that when, after the war's end, Japanese workers tried to restart the labour movement, there were no organisations which could serve as the nuclei around which workers could unite. At that time, workers' demands for wage rises and democratisation were legion, but the only way to achieve them was to pressure individual managements. It was entirely natural that one should feel solidarity with fellow-workers whom one met every day and with whom one worked. For their part, management was loathe to negotiate with anyone from outside the company and sought by various means to ensure that unions were restricted to individual companies. The wider historical dimension also ought not to be overlooked in considering this question. There was no western-style craft-union tradition in Japan, no custom of regulating working practices beyond the framework of the single company. Prior to industrialisation, what workers' organisations there were had been formed at the behest of the political authorities for the purpose of making tax-collecting more effective. There were none of the autonomous craft guilds such as had developed in the free cities of western and central Europe.
Why then have most post-war Japanese unions been able to organise blue-collar and white-collar workers in the same union? Before addressing this question, we must first ask why it was that white-collar workers, who had never before been unionised, sought to join unions. This was because white-collar workers found themselves in the same state of economic privation as blue-collar workers as a result of post-war inflation, food scarcities and the damage wrought by the wartime bombing, and they felt that the only way to tackle their problems was through unionisation.
Lower-ranking white-collar workers - those educated to junior high school level - also harboured a deep sense of frustration about the discrimination between themselves and university graduates. They joined with blue-collar workers in calling for workplace democratisation. University graduates, for their part, while they all had the possibility of becoming managers, were dissatisfied with their low wages and had to live with feelings of insecurity about their company's future. They felt more committed to the company than blue-collar workers. They were also in a better position both to gain and to understand information about the company's condition and prospects. Most companies had been engaged in military production, which stopped with the war's end, and it was assumed that plant and equipment would be sequestrated in lieu of reparations. Many university graduates accused their bosses of war crimes or else called for the resignation of managers who had lost their confidence as a result of defeat. The younger men had received their higher education in the late 1920s and 1930s when the influence of Marxism on college and university campuses had been strong. This was another reason why, after the war, these former university graduates actively participated in the union movement and provided many of its leaders. Their bitter wartime experiences had also heightened their social conscience and stimulated them to seek meaningful social change.
Why did blue-collar workers accept white-collar workers both as fellow union members and even as leaders? Firstly, there was little sense of a tradition of class solidarity among Japanese blue-collar workers. They were far from harbouring any feelings of 'them and us'. Even in the pre-war union movement, many top leaders had been university-graduated intellectuals. There had been some opposition to leadership by such men, but it had been very limited. This was no doubt because Japanese workers had no particular pride in belonging to the working class; on the contrary, they sought rather to escape from it. Secondly, the suppression of the union movement in the years prior to and during the war had severely damaged the movement's traditions. As a result, there were few blue-collar workers with the necessary knowledge and experience to be able to handle the written formalities and other problems involved in the formation of unions. They were therefore forced to rely on the better-educated white-collar workers. Also, due to their ease of access to information about their companies, white-collar workers were able to speak and write more persuasively than blue-collar men.
Blue-collar workers could easily understand that white-collar workers were also badly off, and they found the argument for joint rather than separate action in the pursuit of pay claims only too persuasive. Furthermore, a blue-collar worker would have found it more difficult to gain the support of the whole plant than a white-collar worker, because blue-collar workers were not in a position to get to know men in sections other than their own, whereas white-collar workers, and especially section heads, had many men under them and could easily communicate with a wider range of employees. If a certain section chief had a good reputation, then union support for him would in turn bring the union many supporters. This was the reason why there were many examples, during the period when unions were being formed, of blue-collar workers asking white-collar section chiefs to join them and help in the process.
The struggle for the control of production
Despite the large number of unions and union members, there were surprisingly few industrial disputes in the period immediately after the war: a mere 810 disputes involving 635,000 workers in the whole of 1946. Due to employers' confusion and lack of authority in the immediate post-war period, workers were easily able both to secure recognition of their new unions and to obtain their demands.
A notable feature of the disputes in 1946 is the fact that in many disputes workers took over control of production. In that period of rampant inflation, owing to the lack of food and other goods, employers did not suffer even if workers went on strike, because the price of raw materials was continually spiralling upwards, and employers were able to make a profit simply by selling unworked raw materials. This practice was obviously threatened by the struggle for workers' control of production, which was a severe psychological shock for employers. Also, at a time of chronic shortages of consumer goods when the whole of society was suffering from a lack of articles of all kinds, workers felt that their control of production and increased output would gain more public support than strikes, and the participants in such disputes were thus able to engage in them in good conscience. The reason why the Japanese government and the Occupation authorities did not move immediately to outlaw such disputes - which, after all, touched on the fundamental principle of private ownership of property - was that there were those at GHQ who also felt that such tactics were more constructive than recourse to strikes.
The significance of the demand for 'democratisation of management'
The significance of the labour disputes of this period for the later development of Japanese labour-management relations lies in the demand for the 'democratisation of management'. This demand was strongly supported by union members as a whole, but it meant different things according to union members' place in the company hierarchy. For blue-collar workers, it meant doing away with the discriminatory practices they had had to endure owing to their lower educational background - a demand for which was the outcome of the strong resentment of such practices felt by workers over the years. For lower-ranking white-collar and supervisory staff, it meant an end to discriminatory practices between them and university graduates. For section chiefs, it meant confrontation with the generation of wartime managers and the demand for a share in higher management responsibilities, notably in personnel management.
Pre-war Japanese companies, with a few exceptions, operated the following kind of in-house status system: shain = regular staff were recruited from university and senior high school graduates only. Junior high school graduates were known as jun-shain (semi-regular employees). Between them and regular employees, there were marked differences in wage levels, bonuses and housing benefits. Those who had received only elementary education, such as office boys and janitors, were called yatoi (hired hands) and were treated as blue-collar workers. Foremen were promoted from the blue-collar workforce and were classed as semi-regular employees like junior high school graduates; they were looked down upon by white-collar staff. Factory workers were recruited from among those with an elementary school education and their conditions of work differed considerably from those of white-collar workers in various ways. While white-collar workers were paid a monthly salary, for instance, factory workers were paid by the day, which meant that if they were absent from work for a day or two their pay was immediately docked, which was not the case with salaried workers. Factory workers were in general under much stricter supervision and control than salaried employees. They had to use a special entrance to get into the plant and, on leaving, were subjected to body searches to check if they had pilfered any company equipment or tools. Only salaried staff received the normal twice-yearly bonuses. Factory workers regarded all this as discrimination on the grounds of status. In particular, they bitterly resented having to subject themselves to the body searches which were carried out in full view of everyone and with a degree of arrogance by the company security staff.
With the Occupation, democracy became the supreme value and numerous Japanese social customs were branded as feudal, pre-modern or undemocratic. Responding to this new social mood, blue-collar workers began to demand the removal of discriminatory practices on the grounds that they were undemocratic. The result was that the more crass forms of discrimination, such as separate factory entrances and body checks, soon disappeared. Status designations such as shokkō (factory hand) and rōmusha (labourer) were abolished and replaced by the more egalitarian-sounding 'employee' (jugyōin) or 'company man/staff' (shain). There could be no change, however, in the difference between manual and desk work and, effectively, demarcation remained between manual and office workers. Those new university graduates who were marked out for future management positions continued to be selected and posted by company head offices, while high school graduates and below were employed at company plants. The speed of and limits to promotions continued to be determined by the employee's education record. Industries and companies where there had been a lot of piece-rate work were slower to introduce monthly salaries for blue-collar workers, but by the 1950s most companies had done so. In the 1960s, there was a fundamental shift in that companies began to draw the majority of their new blue-collar employees from high school rather than junior high school graduates. Promotion prospects were opened up equally to both blue- and white-collar workers, and the number of companies that removed all limits on promotions for blue-collar workers increased markedly.
This equalisation of treatment meant the end of the resentments against discrimination which Japanese workers had harboured for decades. These resentments had surfaced again and again in labour disputes, especially in those which took a particularly violent turn. These were by no means merely disputes about economic grievances. They were invariably accompanied by moral and emotional confrontations which reflected the workers' intense anger at the high-handed manner in which employers and supervisors treated them and ignored their feelings. However, it must not be overlooked that while Japanese tend to resent discrimination and demand to be treated like everyone else, their demand is not based on any concepts of human rights or human equality. They are not opposed to discrimination in itself; they just want to be treated as proper members of the community to which they belong. This can be seen clearly in the nature of Japanese discourse. When Japanese speak to each other, they are always making internal judgements of the state of the relationship between themselves and the other. Society requires them to pay very careful attention to the way they select forms of personal address, for example. Social relations in Japan simply cannot be maintained if occupation, status, age and the male-female relationship is ignored in any form of discourse. At the risk of pressing the point, it could be said that for Japanese, there is no one equal to oneself; everyone else is either of higher or lower status. It is only natural that there should be discrimination in a situation where there is no equality. However, it is not a fixed form of discrimination as in a caste system, but rather is fluid and ever-changing according to the different levels of social relationship into which one enters. Furthermore, such relative social relationships are determined not by a single criterion, but by a complex of interwoven criteria: occupation, status, age and sex.
In a society which is based on relative differences in social relationships between oneself and others, people resent unreasonable discrimination (that is, discrimination that is perceived to be unreasonable), but at the same time recognise reasonable discrimination. A problem arises here with respect to the social criteria for judging what is perceived to be unreasonable or justified. These social criteria change with time and place. In the status-determined society of pre-Meiji Restoration Japan, discrimination on the basis of occupation was the basis of the social order. Such status-based discrimination was legally abolished after the Restoration, but although people did not cease to judge their social status vis-à-vis others in social relationships, the criteria for judging changed. As a result of the introduction of the universal school system, educational achievement and ability came to be strongly emphasised. In other words, it came to be thought natural that if one is recognised to be possessed of ability, one should be rewarded by a high-ranking occupation and by a high salary. However, the cause of blue-collar workers' resentments with regard to educationally based discrimination before and just after the Second World War was that one's educational record was determined by one's parents' financial circumstances and not by individual ability alone.
The new meritocratic influence was what lay behind companies' decisions to introduce examinations for junior high school graduate blue-collar workers wanting promotion to white-collar jobs or for high school graduate employees who sought to get on to the elite managerial track. The examination system came in at the same time as the equalisation of the treatment of blue- and white-collar workers. Japanese regard rankings which are determined solely by ability as unfair. They feel that it is only right that commitment and age (length of service) also ought to play a part in assessing ranking. Indeed, it can be said that the criteria for ranking in the Japanese workplace are a mixture of length of service, ability and aptitude.
The character of management, the other side of any labour relationship, also underwent far-reaching changes after the war. Until 1945, the norm had been for ultimate decision-making powers in Japanese business to lie with the owner's family and relatives. However, owing to the large number of pre-war owners who were found culpable of dubious wartime activities, most were purged from their positions by order of GHQ. Suddenly 2,210 top company managers lost their jobs and were replaced by younger managers chosen from amongst the staff. Since then, the pattern in large Japanese companies has been for university graduates to join the company immediately on graduation and to work their way up the career ladder, gaining experience of various sides of the business for some thirty years until they come to the position of being eligible for selection to the board of directors. In the first ten to fifteen years of their career, they are members of the labour union of the company and many of them gain experience as union executives. According to statistics of a survey conducted by Nikkeiren in 1981, of 313 member companies which responded to the survey, it was the case that in 232 companies (74.1 per cent), former union executives went on to become company executives; of the 6,121 company executives, 992 (16.2 per cent) had had experience of serving as union executives.
In the public sector, there were no such unions in which career officials and non-career officials belonged to the same organisation, because the career officials are selected through the public examination system prior to taking up employment, and subsequently would not usually join a union. Non-career officials hardly ever rise beyond the level of section chief. This is one of the reasons why labour relations are more tense or confrontational in the public sector, where workers do not have the right to strike, than they are in the private sector where unions cooperate more with management.
The change in GHQ policy and the employers' counter-attack
Labour unions' successes in the immediate post-war period did not last long. The peak of union activity was the attempted general strike of 1 February 1947, which was prohibited by the Occupational forces. With MacArthur's order removing the right to strike from public-sector unions, which had been at the centre of plans for the February general strike, the labour movement suddenly began to falter and retreat. The movement was also weakened by conflict within the ranks of its national organisation, Sanbetsu-Kaigi, where there was dissension over the issue of leadership of the Japan Communist Party. Meanwhile, employers encouraged by GHQ's change of policy, moved onto the offensive by refusing to recognise previous labour agreements which had stipulated that unions must give their consent to any personnel changes. Employers were also opposed to managerial staff joining union posts on the grounds that it was 'abnormal'. For example, in 1948 Nikkeiren called for 'clarification of the line between ordinary staff (clerks) who can join unions and managerial staff who are not allowed to be union members' and also 'for management to make clear that they will not help unions in any way' (by the free use of company property, payment of wages to full-time union officials, etc.). They succeeded in having their demand that union membership be strictly limited to 'representatives of the interests of the members' incorporated into the 1949 amendment of the Trade Union Law. This had the effect of causing many section chief-level union members to withdraw from membership. Sub-section chiefs and supervisory staff remained, however, and union leadership gradually passed into the hand of foremen and supervisors who were promoted from blue-collar workers and who worked alongside them.
In 1950, GHQ manoeuvring brought about the formation of Sōhyō (General Council of Trade Unions in Japan) from the former Sōdōmei and from individual groups which had broken away from Sanbetsu-Kaigi after opposition to its Communist Party leadership. The new organisation sought to join the International Confederation of Free Trade Unions (CFTU), but soon after its formation it adopted the so-called Four Peace Principles, namely, it opposed the re-arming of Japan, it opposed Japanese support for American military bases, it opposed the signing of a peace treaty which excluded China and the Soviet Union and it formally adopted as fundamental union policy strict adherence to neutrality. At the same time, it sought to accompany all this with a reactivation of the union movement. These developments, completely unforeseen by GHQ, owed very much to the fact that Sōhyō was then under the leadership of militant socialist Minoru Takano, but he himself enjoyed wide support amongst the Japanese people who were extremely alarmed by GHQ's move to amend the Constitution in order to provide for Japanese rearmament. Their feelings were based on their vivid experience of the recent war. Until 1941, the Japanese had had hardly any experience of warfare against foreigners in Japan itself, but during the Second World War, they had had to ensure daily bombing. The unforgettable horror of the atomic bombs above all had burned itself into their collective memory. In the 1950s, that memory was much fresher and more vivid than it is today. The fact that Japan was the forward military base for UN forces during the Korean War made the Japanese keenly aware that the dreadful prospect of nuclear war was by no means an impossibility.
The period of economic growth, 1955-74
Twenty years of sustained growth
The Japanese GNP grew at an average 7.6 per cent between 1955 and 1959 in real terms and at an average 11 per cent between 1960 and 1970. The number of those in employment almost doubled from 17,420,000 in 1955 to 34,440,000 in 1975. The increase was particularly vigorous - 1,000,000 a year - in the 10-year period from 1955 to 1965. On the other hand, there was a corresponding decrease in the self-employed workforce in the farming, forestry, and fishing industries from 15,050,000 in 1955 to 6,900,000 in 1975.
In the first half of this period, there were major labour disputes in most industries, and the majority of them were related to company rationalisation programs. The 1952 Electric Industries dispute, the 1953 Nissan Motor Co. Ltd dispute, the eleven strikes by the Steelworkers' union Tekko Roren in 1957, the 1958 Oji Paper Manufacturing Co. Ltd dispute, the 1960 Mi'ike Coalmine dispute, and the 1964 Mitsubishi Shipbuilders' dispute at Nagasaki - all these were disputes in leading companies in their respective sectors. They were, of course, not all of exactly the same pattern, each had its own specific problems, but they all shared similar features. As the pace of competition stiffened, the relatively beneficent working conditions in these leading companies began to have an adverse effect on their profit margins and they turned to rationalisation to solve the problem. In a growing industry, those companies which arrived on the scene later sought to cut the market share of older, more established companies by investing in new equipment, paying comparatively lower wages, and thus boosting their competitiveness. Unions in the older leading companies had been able to maintain high wage levels by appealing to the company's prestigiously high-wage profile. Drawing on this experience, many unions in the older companies which had built up considerable organizational and bargaining strengths opposed rationalisation plans. In every one of those disputes, the companies involved strove to shut out union leaders and activists, which often led to splits in the union and the founding of new unions. But however strong, none of the unions, precisely because they were enterprise unions, was able to maintain a long strike, because during the period of the strike, the company's market share would be eaten into by other companies, profits would fall, and in the worst cases, lay-offs would follow. Another problematic consequence of enterprise unions was the fact that even those 'elite course' men who were clearly marked out for managerial posts in the future belonged to the union for ten to twenty years after joining the company and often became union officials. Many of them were inclined towards management thinking on issues like wage rises and rationalisation. In other words, even within the union there were groups which tended to share the same thinking as the management.
When there was a split in the union, it was also related to the nature of plant unions that those who broke away first tended to be white-collar workers and then supervisory staff and foremen. Amongst the university-educated white-collar workers, there were many who had experience of student activism and had gone on to become union leaders. When they quit their union activities after a relatively short while, their experience was taken as evidence of leadership quality and would often buy an advantage in the company promotion race. But if they continued to take a non-cooperative attitude towards the company, they were sure to lose when it came to promotion time. Blue-collar workers too had to be resolved to put up with various discriminatory practices, such as transfers to undesirable locations. Those who remained with the original union were usually Communist Party members or belonged to the left wing of the Socialist Party. They would find themselves increasingly isolated at work and would eventually have to choose between either joining the more compliant 'second union' (daini kumiai) or else leaving the company. One of the main reasons why workers invariably lost their struggles with management was because their unions were all organised on a company basis.
When it was a matter of getting rid of a troublesome union, employers in some industries and firms (shipbuilding, electrical engineering; Toshiba, Hitachi etc.) would often form secret informal groups aimed at combining efforts to shut out the more radical union activists. They set up systems whereby their members could monopolise union posts. During this period, the leadership of unions in Japan's major private corporations gradually passed into the hands of men who could be counted on to be 'cooperative'. The basic policy of unions led by such men was to cooperate with the company to ensure that it did not lose in the struggle for increased market share, and thereby union members would be guaranteed a greater cut of the pie during the distribution of the profits that would result.
However, although the workers indeed lost most of their disputes in this period, they did come away with something to show for their efforts. Employers realised the damaging effects of disputes both on the company's economic performance, and on morale when rival unions clashed. They therefore determined to avoid the tactic of encouraging rival unions in the future and opted instead for a policy of encouraging unions to work in partnership with the management. The price they were prepared to pay to obtain union agreement to this was recognition of the effective 'right' to 'lifetime employment'. What made it possible for managements to do this was the increased profitability which had resulted from the long period of sustained high growth. The downside of this was that it institutionalised the practice of using temporary workers to enable the company to cope with periodic fluctuations in demand. These employees, while working alongside regular workers, shared few or none of the benefits of regular employment, but had to work long hours when business was good, and were promptly shed when they were no longer needed.
The Japanese labour movement developed its own unique form of campaigning in this period - Shunto (Spring offence). Following a prearranged schedule, groups of unions in one industry after another would put forward demands for wage rises and various fringe benefits, and if these were not met, would simultaneously stage a series of repeated short-term disruptive strikes. When all unions in a particular industry went on strike together, they did not have to worry about their companies losing market share to competitors during the strike period, and since the strikes were all short-term, they would not cause the collapse of the company either. Strikes by single enterprise unions had been found to be largely ineffective, and shunto was a strategy that sought to make up for that weakness. The key element in the shunto campaigns was the decision as to which industry's unions would take the lead. Normally, these were unions in industries which achieved high profits and could afford to meet wage demands. Unions in other industries would then regard such wage rises as a yardstick, a goal at which to aim. In the middle of the shunto campaign period, the railway unions, whose actions always have a significant social impact, would then simultaneously come out on strike. At that point, the Central Labour Relations Commission would step in to mediate, and its actions would usually result in the establishment of criteria for wage rises in other industries. These criteria were perceived to be 'a fair judgement by an impartial third party'.
After 1955 when the shunto campaigns began, and during the period of high growth, profits throughout industry as a whole were good, companies could afford wage rises and the increasing labour shortages during the period all worked in the union's favour. Moreover, although the participants in shunto campaigns represented only a portion of Japan's total labour force, the benefits of the wage rises they achieved flowed over to other groups of unorganised workers and the result was a broad increase in Japanese wage levels as a whole.
However, younger workers gradually began to feel frustrated by this system of demands for higher base rates, because the average rate of increase which was the publicly declared result of the campaign was often quite different from the amount workers actually received. The average amount of the wage rise represented only the increased proportion of company wage costs and not the actual amount distributed to each worker. It was only natural that workers should feel frustrated when they received only ¥500 of a declared ¥2,000 average increase. Neither companies nor unions could afford to ignore the disquiet among the younger workers whose skills in operating new high-technology equipment were responsible for boosting output and profits. The result was the broad adoption of the so-called fixed-raise-plus alpha formula. This provided for a uniform amount of increase for all union members and thus ensured that younger workers would at least always get a certain set amount. With each passing year, this system led to a narrowing of the gaps between the wages of younger and middle-aged workers and between those of blue- and white-collar workers. Graph curves of wage profiles show the wages of blue-collar workers increasingly approximating those of white-collar workers, but this was, after all, also due to the fact that both groups of workers invariably belonged to the same unions which had presented the same wage demands. In wage terms, the period thus saw a considerable 'whitening' of blue collars.
The consolidation of the shunto system also saw a change in the basic unit of union organisation. Union decisions had previously been taken at plant level, but now there was a move towards company level organisation. All the major labour concerns-wage rises, bonuses, severance pay etc. - were increasingly negotiated and decided for the company as a whole rather than at the individual plant level.
In some industries, such as steel, wages at shunto time were increasingly determined by agreements among employers in the same business rather than in single firms, and collective bargaining between union and management at the plant level became an empty formality. It was superseded by ongoing discussions between the union and management prior to the shunto season. From the beginning, in labour relations at the plant level, there had been no clear distinction between labour-management joint consultation and collective bargaining. There had also been a tendency to move to collective bargaining only when joint consultation had failed to agree. This tendency now became even stronger. The reason there was no clear distinction between joint consultation and collective bargaining was that there were no German-style industry-wide unions which appointed union officials in each plant and who could thus take part in discussions with management. In Japan, the participants at joint consultation and in collective bargaining discussions were invariably the same people. Furthermore, owing to the infrequency of clashes of views between management and unions, management conferences usually consisted of descriptions by management of plans for production and equipment to which the union representatives would merely add their opinion.
The period of power economic growth, 1975 to the present
The diffusion of flexible manufacturing systems
With the oil crisis of 1973, Japanese manufacturers were suddenly faced with a steep rise in production costs. Employers responded by investing even more heavily in new equipment and by introducing flexible manufacturing systems which could adjust to market demands for different types and quantities of product. It was during this period that the rest of the world began to take notice of the efficiency of Japanese industry. Previously, people had believed that Japan's competitiveness was due to its relatively low wages and inferior working conditions, and they had tended to brand Japanese labour relations as pre-modern and outdated. Behind the volte-face in such views lay the rapid progress that was made at this time in micro-electronics technology and its swift application by Japanese industry as a whole. The new technology made possible continual upgrading of productive techniques. For example, the 'Just in Time' system developed by Toyota and widely adopted by other firms facilitated the frequent reformation of the production process, and as a consequence workers were often moved about and had to be able to adapt themselves to new jobs. An indispensable element of this kind of production system was the worker who was not attached to one job only but who could flexibly apply himself to working with new technology. This was why Japanese productivity and the 'Japanese-style labour relations' that underlay it drew increasing attention.
The high quality of Japanese products was also focused on at this time, as well as small group activities, such as Quality Circles which began in the early 1960s. Motives other than improving quality and cutting costs underlay these latter. Through the Quality Circle movement, employers hoped to bind all their workers into groups that would cooperate with management. The unique feature of the practice is that workers 'voluntarily' cooperate with the company in reviewing and evaluating their work and thus contribute to cutting costs. In the history of labour world-wide, there have surely been few such examples of workers voluntarily cooperating in activities that might eventually undercut their own work. Why did this happen in Japan? Yet, the question could equally well be put the other way around: why has it not happened elsewhere? Indeed, the question in this form is actually easier to answer.
Why then did Japanese workers not only not oppose new technology, but actually cooperate with its introduction? Some elucidation of the historical background is required to answer this question. Prior to industrialisation, the kind of autonomous, self-governing guild organisation that emerged in Europe had no chance to develop. Such artisans' organisations as existed were created by the domain authorities for the purpose of facilitating tax-collection. This is why craft unions failed to emerge in Japan. Related to this, another difference between Japan and the West lies in the contrasting attitudes towards competition between workers.
The aim of the western guilds was precisely to reduce competition between workers in terms of working hours, output, and wages, but in Japan, there has been a deep-rooted feeling that those with ability who do their best ought to be well-rewarded. Materials and sources are insufficient that would allow a reasonable judgement as to whether this feeling worked against the emergence of craft guilds, or whether it resulted from the lack of craft guilds. Also, in craft guilds and unions, job demarcation has been confirmed and reinforced socially, but there is comparatively little of this in Japan; the distinctions between skilled, semi-skilled, and unskilled work have been more vague. This is one of the reasons why Japanese workers have not been averse to transfers to different kinds of work.
Another factor which helps to explain why Japanese workers have been so cooperative in working to boost productivity is that during the 20-year period of high growth, workers came to feel that the bigger the pie, the more there would be in it for them. They reckoned that short-term sacrifices in cooperating with the company were acceptable if they led to a greater distribution of company profits in the long term.
Employers had learned from the big disputes of the 1950s and made it clear that regular workers' positions would be secure in any rationalisations. These workers were thus able to feel that the introduction of new technology presented no threat to their employment. The introduction of robots did mean, of course, that there was a high chance that some workers' acquired skills would be made redundant. But the Japanese company had never hired its regular employees in order to train them to do only a single job but rather as workers who would be able to handle a variety of jobs and skills. Companies thus employed workers without any particular skill, frequently rotated them within the company and built up their skills by on-the-job training. Rotations often meant promotions, which was another reason why there was little opposition to them. Blue-collar workers were not moved as often as white-collar workers, but they too were not kept at only one job and, as their career with the company developed, they were moved on to more skilled jobs. Nor was it unusual for a worker to be engaged alternately in a number of different jobs at the same workshop at any one time. Hardly any workers thus felt attached to a particular job or skill. Also, even if a relocation might mean a lower-skilled job for a time, the practice of seniority-based wage payments meant that the worker's wages would likely be unaffected by the move.
One reason why Japanese unions did not offer any opposition to new technology was because they were company-based unions. To oppose new technology would have meant that one's company would lose in competition with its rivals, which could only lead to lower wages and, in the worst-case scenario, company closure and mass redundancy. Within the company, Japanese workers felt no sense of 'them and us', but it is no exaggeration to say that in those industries where marketplace competition was especially fierce, Japanese workers did indeed come to regard people in other companies as 'them' and all members of their own company as 'us'. For some individual workers, of course, job relocation did indeed mean disadvantage. A worker's family would be greatly affected by a company decision to 'scrap and build', which often required families to move to a completely different location. At such times, it fell to the union to try to minimise the effects of such decisions. Nevertheless, even in such cases unions rarely offered strong opposition to the management's decision.
Revision of the seniority system - the introduction of meritocratic management
Japanese employers have always considered company-based unions to be one of the most important components of Japanese labour relations and have done all they could to ensure the continuance of the enterprise union concept. They have not given the same wholehearted support to the 'lifetime employment' and 'seniority wage' systems. The establishment and maintenance of the 'lifetime employment' system owes far more to pressure from the unions. For their part, employers would obviously prefer a system which allowed them to freely adjust their labour complement to meet the changing demands of the market.
But with the gradual tightening of the labour market during the high growth period, starting rates for new recruits began to show substantial rises. Under the seniority system, this obviously pushed up wages for the entire workforce and thus led to a rapid rise in company wage bills. This was what lay behind the calls for a reassessment of the seniority wage system that came to be heard increasingly from the mid-1960s onwards. Many employers stressed the need to revise the seniority wage system and replace it by a more meritocratic system. Meanwhile, younger workers had themselves begun to feel their own misgivings about the seniority wage system. The result was that a meritocratic element, in which workers' pay and promotions were assessed on the basis of results achieved, was grafted onto what had been until then a basically age-related system. Thereafter, the age-related component of the worker's total wage gradually diminished in proportion, while the meritocratic, ability assessment-related component increased.
More and more companies also came to emphasise meritocracy rather than just length of service in considering promotions. There had from the first been a certain contradiction between the concepts of lifetime employment and the seniority wage. Positions of responsibility obviously decrease the further up the hierarchy one goes, so one cannot be guaranteed continual automatic improvements in one's position. This contradiction was not so conspicuous when companies were growing rapidly and expanding their managerial echelons. But with the onset of low growth in the 1970s, the problem soon became obvious. This was partly due to the move over to 'meritocratic' wages, because the attempt was made to solve the problem by introducing a ranking system (shikakuseido) which was not directly connected with the worker's actual job. However, it must not be overlooked that whereas the meritocratic element in school education was assessed by examination points - which, although one-sided, are nevertheless objective - the 'meritocratic' element in company assessments included not only the worker's results at his job, but also his age and subjective factors such as his ability to get on with colleagues and his sense of loyalty to the company.
While the seniority wage system was undergoing these changes, the lifetime employment system could not remain unaffected. Those members of the company's 'elite course' who were not marked out for the highest positions were normally transferred to head the boards of affiliate companies about ten years before their retirement. After the oil crisis of 1973, Japanese companies moved to a policy of cost reduction management and took steps to cut excess staffing by emphasising even more than before the principle of meritocracy. The result was an even greater degree of competition for pay and promotion among the workforce. Under the cost reduction management regime, what had hitherto been tacitly understood to mean the promise of a job for life was now broken. Many unions had no effective means of opposing these changes, and the result was a loss of faith by the members in their unions, as is only too clear from the statistics of union membership. From a peak of 55.8 per cent in 1949, membership continued steady at around 35 per cent from 1953 until 1975, after which there was a gradual annual decline for seventeen years. In 1992 the figure stood at 24.4 per cent, which is itself an overestimate in real terms in that since many Japanese unions are organised on a union-shop basis, all company employees have to join the union whether they want to or not. Consequently, although they may be union members in the formal sense, they may have little or no consciousness of being such. The figure of 24.4 per cent is thus not a real estimate of members' commitment to unions or of the union movement's actual strength.
Japanese labour relations - the present situation and future prospects
Several keywords that can throw light on the factors that are likely to have an effect on Japanese labour relations in the near future. These keywords are: the declining birthrate, the ageing society, the higher-education-oriented society, the increasing employment of women, the service economy, microelectronics, and globalisation. All these issues are already having a significant social impact; indeed, they are important issues that are necessary for any understanding of Japanese labour relations today, rather than being issues that enable predictions about the future. They are issues that are common to all the advanced countries, but their effects vary according to national conditions. The two which I believe contain the most potential for changing Japanese labour relations are globalisation and the increasing employment of women.
Globalisation has already had a significant impact in the form of the export of Japanese goods, imports of raw materials and direct overseas investment. So-called Japanese-style management practices are also having an effect on foreign labour relations in countries where Japanese companies have set up operations. The emphasis on flexibility, the introduction of Quality Circles and single-union agreements are all evidence of this influence.
On the other hand, the spiralling high yen of recent months is bound to have its own considerable impact on Japanese labour relations in the near future. The export industry, and especially the automobile industry, which has been the locomotive of the Japanese economy for the past twenty years, has been hit hard and is losing competitiveness. One way around this problem will no doubt be sought in recourse to overseas relocation. This will in turn invite the de-industrialisation of Japan, which will then be following the same path as America. However, unions and government, and even some employers, have grave misgivings over such a change of direction, and it is unlikely that it will be assented to completely. If this path is rejected, the only way to maintain international competitiveness will be to effect a drastic reduction in costs. But rationalisation in the manufacturing industry, right down to supplier level, has already been pursued to a point often described as 'trying to wring out a dry towel' and there is little scope for more. Any further rationalisation will thus more likely occur on the administrative, indirect side of industry. Japanese offices have long held to their own uniquely Japanese ways of decision-making, and the productivity has often been described as low in comparison with that of the shop floor. But with the pace of computer technology, the rationalisation of Japanese offices is likely to take off soon. The possibility of large-scale redundancies among white-collar workers, especially middle-aged ones, is very real.
An obvious question is whether the already weakened labour unions will be able to respond to this situation and uphold the principle of 'lifetime employment'. It is hard to be able to answer 'Yes' to this question.
The increasing employment of women has become a conspicuous trend in recent years. In the 1980s, the number of women employees rose to 5,000,000, whereas today (1992) it is almost 20,000,000, or nearly 40 per cent of the total workforce. Most of the increase, however, is accounted for by so-called non-regular workers, that is, by part-timers, temporary workers and personnel agency staff. For a long time, female workers, even those who are regular employees, have been treated within their companies as second-class citizens. Most women workers only worked for a few years until marriage, and they were subject to discrimination in that, even if they were doing the same work as men, they were paid less and had almost no chance of promotion to managerial positions. Since the enactment of the 1986 Equal Opportunity in Employment Law, many companies have recognised the right of their regular female employees to the same advancement prospects as men, but there still remains a gap between recognising the letter of the law and fulfilling its spirit.
In reviewing the past half-century of Japanese labour relations, one cannot but be struck both by the considerable achievements of the union movement during that short period and also by the equally conspicuous weakness of the unions at the present time. The first of the achievements has been that of a substantial rise in real wages. Of course, this was not due simply to the union movement but also to the rapid growth of the Japanese economy and to the fact that for much of the period the Japanese labour market was a seller's market. Yet it is certain that without the labour movement, and in particular shunto such gains would not have been possible. It was also the unions which contributed most to the second achievement: the de facto right to job security for their members. The third major achievement was the raising of the status of blue-collar employees within the company to the point where they were able to consider themselves as members of the middle class, although they had for decades been regarded as the lowest of the low in Japanese society.
Yet at the same time it is clear that it has been just these achievements that have led to the marked decline of the union movement. While the strength of Japanese companies has grown over the years and is now widely recognised around the world, that of the unions has faded proportionately. As the statistics of steadily declining membership make clear, the unions' influence over workers has weakened, and workers today show a conspicuous lack of interest or lack of faith in their unions. Individual workers no longer feel that unions are something to rely on when the going gets tough. In a recent survey on union leaders carried out by the Ohara Institute for Social Research, it was clear that union officials thought that unions had little influence on their members. Other surveys have also shown that a wide cross-section of people feel that the union's influence has waned.
Will Japanese unions be able to come through this situation and recover their lost energies? It is my own view that this is unlikely in the near future, but in the long term, it is not impossible that the union movement will revive.
This paper presented at Development and Future of Labour Relations in Australia and Japan Conference, Woolongong, Australia, 13 - 14 July, 1993.
First published in Industrial Relations in Australia and Japan, edited by Jim Hagan & Andrew Wells, Allen and Unwin Pty Ltd, 1994.