National Wage Determination in Japan
Although Shunto has come to be regarded as an outstanding example of social contract policy ( Taira and Levine, 1985), it was originally designed to increase union bargaining power in order to raise Japanese wages to European levels and to end "discriminatory" wage inequalities resulting from wage setting at the company level ( Takanashi et al., 1989, pp. 5, 6). Shunto has operated not through centralized bargaining but through an annual synchronized process of pattern setting and pattern following.
Under Shunto, formal collective bargaining remains confined to the individual companies and their respective enterprise-based unions, but it has been relegated to the end of a lengthy and pervasive process of consensus building (typically extending from autumn through early spring). The process begins with negotiations within a group of key industries that set the pattern for wage increases in the year ahead. Pattern setting has come to be strongly influenced by current economic analyses, which are supplied by the central federations of unions 1 and employers (Nikkeiren), government (notably, the Economic Planning Agency), and private sources, which are extensively discussed in the news media. Information is transmitted through industry and regional and local affiliates of the central federations on both sides. The national unions, or tan-sans, meet regularly, not only with the "central struggle committee" and the "strategy committee" of the union confederation but also with employer associations in their respective industries and with