wage explosion in the wake of the 1973 oil crisis threatened the economy with inflation, unemployment, and a loss of international competitiveness. With the power of the leading large firms supported by accommodating authorities, Shunto was used to restrain wage movements below productivity growth, assuring the international competitiveness of the export sector.
Finally, in Chapter 7 we offer our conclusions about how firms' practices and national institutions contribute to different outcomes in growth, security, and equality in Japan and the United States. We discuss the lessons that the firms of each country can learn from the employment practices of the other and the extent to which these lessons are constrained by union and government practices. We end with a discussion of how we expect the Japanese and U.S. employment and wage systems to continue to evolve.