Spring is Coming but No Strikes

▽ Bitter cold winter for the Japanese salaried workers. Rengo, the Japanese trade union confederation, set the employment stability as the goal of negotiation for this year considering the lagging Japanese economy, giving up the request for pay increase. Nevertheless, as companies are trying to get rid of the regular wage increase in an attempt to cut back on labor cost, there is heightening tension between labor and management.

Mitsubishi Motor decided on Feb. 13 that it would abolish the system to raise the pay of full-time workers on a regular basis, starting from April. The two sides agreed in principle to introduce a system to give bonus in accordance with individual performance, instead of the system to raise the pay every year according to the age and qualification.

Fujitsu, which saw a deficit last year in a tentative estimation, also decided to lower the range of regular pay increase. Companies including Canon, Honda, Hitachi, and NEC are also poised to repair the current wage system toward abolishing the regular pay increase system or raising the rate of incentive. Among Japanese companies, the trade union of Toyota, of which projected ordinary income reaches 1.5 trillion yen last year, are requesting for a temporary bonus.

The average salary of the Japanese companies had barely managed to maintain the increase rate of 1 percent since 2000 and the rate dropped to 0 percent last year for the first time. The trade unions complain that thanks to the regular pay increase the amount of automatic pay raise could reach 1.89 percent, offsetting the frozen amount of salary and say that they don`t know what to do without it.

▽ Would it be possible to have a new Japanese-style performance-oriented wage system? The Japanese management contends that much too high wages of the nation compared to overseas are the cause of weakening international competitiveness, arguing for doing away with the regular pay increase system. The current Nikkeiren (the Japan Business Federation) chief and Toyota chairman Hiroshi Okuda claimed, “It is non-sense to raise employees` wages while the corporate productivities are declining. When the bubble in the pay bursts, the employment will increase in the long run.”

Meanwhile, the trade union countered, “The regular pay increase is supposed to be a pride of the Japanese salaried workers, that has been guaranteed in return for the loyalty to the company. The abolition would discourage the enthusiasm to work, thereby dampening the corporate management.”

Experts see the outcome of the dispute over the regular pay increase as a signal to a new Japanese wage system.

parkwj@donga.com