Despite Nation's Wealth, Workers Expect Low Wages
Close union ties to employers stunts militancy. JAPAN: LABOR NEGOTIATIONS
IN affluent Japan, postal worker Masayuki Shimura doesn't feel affluent. And rather than change the situation, he is resigned to it. He is one of 8 million union members who await the results of next week's ``spring offensive,'' a yearly exercise in which organized labor and employers agree on how much to raise workers wages.Skip to next paragraph
Subscribe Today to the Monitor
The negotiations, which set the pace for the salaries of many nonunion Japanese workers, were supposed to be different this year. Unions had tough new demands. They boldly asked for wage increases of 8 to 9 percent.
``If Japanese companies can afford to buy buildings in the United States, then they can raise our wages,'' says Takashige Ida, a top union leader.
But Mr. Shimura, who sorts mail by day and counts his precious yen by night, says many Japanese workers do not expect to see much of the wealth that the rest of world sees coming out of Japan. The unions are widely expected to settle for a 6 percent rise.
``Maybe we have a feeling of giving up,'' he says.
Shimura's dream of owning a home has evaporated as Tokyo land prices have soared. And his wages have not kept up with prices on everyday goods or with new taxes.
For postal workers especially, many of whom earn about $15,000 a year, their low earnings make for a ``miserable'' life, says Shimura at Tokyo's Kojimachi post office.
Worker resentment at a growing disparity of wealth in Japan is on the rise, say many economists, but this year's ``spring offensive'' (called shunto in Japanese) will not reflect it.
Union members still do not see that Japan has a lot of inequities because of major economic distortions, says Haruo Shimada, a Keio University economics professor.
Much of the booming wealth of the past four years has gone into the stock market, land purchases, and overseas investments, he says, not into the pockets of workers. And unions are divided because about half of their members own property, and have benefited from the skyrocketing land boom.
For the first time, the spring offensive is led by a new umbrella union, the Japanese Trade Union Confederation, or Rengo. A majority of its members work in industry. The peak for the various rounds of negotiations comes on April 4 and 5.
Rengo was formed last November, combining the largest labor federation, Sohyo, and the powerful government workers union, Kankoro. The merger was designed to give added clout to workers' demands.
But, says Dr. Shimada, the two old unions still keep their own structure and finances, leaving Rengo with little resources to match the employers' arguments. And Rengo is hampered by a system in which unions are tied very much to their companies, and tend to reflect company rather than worker interests.
``Japan has no real champion for the workers' voices,'' he says.
One potential advantage for labor is Japan's acute shortage of young people entering the workforce. On average, about 13 jobs are available for every 10 people seeking work. Just a few years ago, that ratio was a much lower six jobs for every 10 people.
But the Japanese Federation of Employers' Associations (Nikkeiren), which leds the talks with Rengo, expects this labor shortage to ease as economic growth slows this year.
Last July, labor also gained some clout in a big victory for Japan's Socialist Party in the upper house elections. But labor-affiliated candidates did not do well in the more important elections for the lower house last Feburary.
Rengo was also designed to blend the radical nature of public unions and the more compromising stance of private unions. But, says Bank of Tokyo economist Soichi Enkyo, Rengo still cooperates with industry.
Japan's workers willingly accepted relatively low wage hikes since 1986, when the country's economy was hit by a drastic rise in the value of the yen.
As Japanese industry adjusted to the new yen value, workers went along with the need to sacrifice.
``Now labor wants the fruits of their sacrifice,'' Mr. Enkyo says.
Rengo has an advantage in pointing to high corporate profits over the past year. Last December, companies passed out bonuses averaging 8 percent to workers.
Nikkeiren chairman Eiji Suzuki says Rengo should receive less than 5 percent. Anything higher would spark inflation, he says, and would not be in line with projections of slower economic growth. After last year's offensive, the average hike for the unions was 5.1 percent.
The economy can easily absorb a 6 percent wage hike, says economist Enkyo, since that amount is about the same as the rise in worker productivity and well below the expected nominal increase of 4.0 percent in general economic growth.
Since 1986, Japan's economy has moved from being export-led toward one driven by domestic demand, mainly industrial investment. This year, the leading role for growth will be consumer spending, says Enkyo.
Rengo official Ida says the employers should meet their demands for 8 to 9 percent in order to help the economy to become even more consumer-led.
But a big blow to Rengo's hopes has been the one-quarter drop in value of the Tokyo stock market and a 9 percent decline in the value of the yen over the past three months. Employers are expected to cite this ``crisis'' to wring a new compromise from Rengo.