Work and Pay in the United States and Japan

By Clair Brown; Yoshifumi Nakata et al. | Go to book overview

NOTES
1.
Originally, the only central federation of industrial unions involved in Shunto was Sohyo, its left-wing founder. Domei, a federation with right-wing socialist affiliations, which was formed by secession from Sohyo in the early 1950s, did not participate at first, but many of its affiliated industrial federations joined in as the economy gathered momentum and labor shortage developed. Two other smaller, independent central federations, Churitsu Roren and Shinsabetsu, joined Sohyo in the Shunto Joint Council, and all four central bodies cooperated in bargaining activities ( Taira and Levine, 1985, pp. 284-288). Finally, after many attempts at unification, a single central council, Rengo, was formed in 1989 and has taken over the leadership role in Shunto. The existence of independent union councils in the industrial sector, which cut across political differences, should also be noted. In particular, the International Metalworkers, Japan Council, or IMF-JC, which originated in 1964, has come to acquire great influence in coordinating the bargaining of the national unions, or tan-sans, in steel, auto, electrical equipment, machinery, and shipbuilding.
2.
One-shot bargaining in Japan was adopted in other sectors and ultimately became ritualized and softened, since announcement of a company's first and last offer is actually preceded by discussions between the parties. Still, the ritual can serve as a reminder of where the preponderance of bargaining power ultimately lies. It might be noted that this practice was found in the United States to be incompatible with the legal requirement that the employer bargain with the union in good faith.
3.
We are indebted to Professor Mitsuo Ishida for the observation that after the first oil price shock, enterprise unions focused their bargaining on the welfare of their members over their entire employment careers with the firm. In this connection, they became concerned not only with employment security but also with such items as employee savings plans and housing subsidies and were willing to forgo some immediate increases in wages for concessions in all of these areas.
4.
Recent examples include outsourcing assembly or other relatively unskilled operations abroad and even replacing conveyors with small groups of multiskilled functions, both of which would tend to increase the skill concentration of the domestic labor force and (in the latter case) increase the intensity of work ( Wall Street Journal, October 24, 1994, pp. A1, A4; The Economist, October 29, 1994, pp. 83-84). Other forms of unit cost reduction include simplified product design ( Wall Street Journal, October 26, 1994, p. A16). Toyota's increased profitability in the face of relatively stagnant domestic demand in 1994 has been attributed in part to cost reductions that helped it to increase exports in the face of a strong appreciation of the yen vis-à-vis the dollar. (Exports were also facilitated by strong domestic demand in the United States) ( Financial Times, February 12, 19, 1995 , p. 11.)
5.
In 1994, manufacturing production overseas amounted to 8.2 percent of domestic manufacturing production, but production of multinational firms amounted to 20.9 percent of their domestic output. The differences in employment shares was even more striking--1.5 percent versus 10.8 percent ( OECD, 1995b, Table 7, p. 29).

-190-

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