Rodo-Soken Journal

No. 48　2010/06

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Labor gains in the 2010 Spring Struggle

By FUJITA Hiroshi

Standing member of the Rodo-soken Board of Directors

In Japan, trade unions are organized at companies. Workers’ wages are determined at each company. There is no industrial contract as in European countries. There are industrial federations, but they do not have functions of concluding industrial contracts. Unions instead participate in concerted actions for wage increases in each industry, known as the Spring Struggle in February-April every year.

Corporate profits are on the rise

Whereas the Japanese workers in the 2009 Spring Struggle faced an adverse economic situation that followed a global financial meltdown triggered by the collapse of Lehman Brothers in 2008, the 2010 Spring Struggle was waged amid a business recovery on the part of major corporations. According to the Finance Ministry’s quarterly survey of corporations’ financial statistics, pretax profits for the fourth quarter of 2009 were up 102.2 percent from a year earlier. Electronics and automobile reported an increase of 864.7 percent.

Since 1998, Japanese workers have faced cutbacks on wages. The average annual income of Japanese workers in 2008 was 3,970,000 yen, down more than 420,000 yen from 1998. Even though corporate profitability began to improve late last year, workers’ wages have continued to decline. The Cabinet Office’s Monthly Economic Report published in April said, “As for the movement of wages, contractual cash earnings have been showing movements of picking up, but the total amount of cash earnings has been on a declining trend.” This explains why workers put forward wage increases as a pressing demand in the 2010 Spring Struggle.

However, the outcome of the Spring Struggle was one of betraying workers’ expectations. Japanese Trade Union Confederation (Rengo) unions won a weighted average of the monthly salary increase at 4,974 yen (about 55 dollars), up 1.71 percent. It was lower than last year’s 1.73 percent wage increase offer of 5,112 yen (or 57 dollars), which was the smallest every increase. As we will see the final results in July, one thing is clear: This year’s wage increase offer will be the worst ever. (See the chart below.)

Average Wage Increases Won by
Two National Trade Union Centers

	Zenroren		Rengo
	Agreed wage increase	Increase from each previous year	Agreed wage increase	Increase from each previous year
	yen	%	yen	%
2000	7547	2.26	6033	1.94
2001	7651	2.26	5928	1.92
2002	7126	2.01	5347	1.72
2003	6470	1.94	5063	1.63
2004	5866	1.86	5298	1.70
2005	6298	1.96	4908	1.68
2006	6331	1.97	5237	1.79
2007	6720	2.00	5523	1.86
2008	6720	2.08	5523	1.88
2009	5926	1.94	4849	1.67

(Source: “Agreed Wage Increases” compiled by the National
Joint Spring Struggle Committee)

Wage increase was not on Rengo's agenda

To begin with, Rengo’s “spring labor offensive” did not include any wage increase demand. In its action plan adopted in autumn 2009, Rengo made it clear that its “spring labor offensive” will aim to halt a further economic and social downturn in Japan and prevent wages from further falling” and to do its utmost to sustain the present wage levels. Thus, Rengo restrained itself from demanding an increase in wages, which had continued to decline, on the pretext of the economic downturn.

In Japan, Rengo-affiliates at large corporations are the price-setters in wage talks during the spring labor offensive.” This year, labor unions at Toyota Motor Corp., Honda Motor Co., Panasonic Corp., Hitachi, Ltd., and other major corporations implemented Rengo’s decision and secured annual wage increases. The system of annual wage increase gives workers, who continually work at the same companies, a regular pay raise. A set annual wage increase does not mean an increase in labor cost unless the company’s composition of employees changes. It is the policy that can be implemented as a matter of course

Rengo’s decision to “sustain the present wage levels” is based on the idea that it is possible to keep the wage levels if workers can get the “set annual wage increase, even if they would not get a basic pay increase. Most unions at large corporations are already promised an annual wage increase system and do not need to demand it. This is why they did not do what ought to be done in a spring labor offensive.

Clearly, Rengo’s position is not one of winning a wage increase. It would be correct to say that it is rather the way to hold down the average wage. For example, in its “spring offensive” last year, Toyota Workers’ Union accepted a management offer of an annual wage increase of 7,100 yen. However, it led to a 4,740 yen decrease in the average monthly salary. With older workers increasing in the labor force, companies tend to force these higher-paid workers to retire and replace them with younger, and therefore lower-paid, workers.

Rengo’s call for the current wage standards to be sustained will not only serve to increase wages but rather contribute to lowering the wage standards in general.

Commenting on Rengo unions’ acceptance of wage offers, Rengo President KOGA Nobuaki said, “We demanded it (securing an annual wage increase) as the minimum need to prevent the wage standards from falling, and the wage offers are in line with the objective of maintaining the standard of living and motivation.” This comment makes it clear that Rengo no longer demands a wage increase if the economic is experiencing a downturn worsening corporate profits, even when workers are worse off. Even if the economy turned around, Rengo will not retract its position of restraining itself from demanding a wage increase on the pretext that the economic outlook is not clear. This is precisely what class collaborationism in Japan is about.

Some of the Rengo-affiliated unions at small- and medium-sized enterprises are joining their forces in waging their spring offensive to win a wage increase without regard for major Rengo unions’ acceptance of wage offers at large corporations. In Japan, with wage gaps widening between companies depending on size, these Rengo unions at smaller companies this year demanded a wage increase of 5,000 yen per month (including a 500 yen increase to narrow gaps between smaller and larger companies). However, many of small- and medium-sized companies do not have an annual wage increase system. In addition, without business recovery trickling down on small- and medium-sized companies, unions only demanded that the annual wage increase be secured. This has had negative impact on unions at smaller companies. The average amount of wage increases won by 1,566 unions in 22 industries was 3,664 yen, up 1.48 percent from last year, but the increase was down 129 yen.

Zenroren campaigned for eradication of poverty and economic inequalities

Zenroren campaigned for the “eradication of poverty and economic inequalities, demanding a wage increase of more than 10,000 yen per month” and a minimum wage of at least 1,000 yen per hour. The average wage increase won by unions that are members of the National Spring Struggle Joint Committee was 5,791 yen (a 1.87 percent increase from last year), but the amount is down 53 yen.

The average wage increase won by Zenroren unions was 818 yen higher than that of Rengo unions. Many Rengo unions are organized at large corporations. Zenroren unions in the private sector, which are mostly organized at small- and medium-sized enterprises, are not powerful enough to become the pace setter for the Spring Struggle. Japanese small- and medium-sized enterprises are financially disadvantaged because they are often forced by large corporations to lower prices of supplies. Retailers are often denied bank loans or forced to repay debts. The government makes much of the large corporations and makes light of small- and medium-sized businesses. These factors are making workers’ struggle for higher wages at small- and medium-sized businesses very difficult.

Nevertheless, wage increases won by Zenroren unions are higher than those won by Rengo unions. This is because Zenroren unions organize their campaigns for wage increases strictly based on the demands of workers, as a matter of course. In fact, Zenroren each year conducts a survey on workers needs, the findings of which are used to determine the demand for the year’s Spring Struggle.

While Rengo unions in their “spring offensive” do not adopt strike tactics, Zenroren organized mass actions, including a 500,000 workers’ concerted action that included strikes. As of March, 345 unions went on strike up from last year’s 335. This shows that Zenroren unions’ struggles are firmly based on the needs of workers in each workplace.

The number of contingent workers has increased rapidly since the second half of the 1990s. They have been used as low-paid workers and as means to effectively hold down wages for workers in general. Since 1999, Zenroren in its Spring Struggle has put an emphasis on the need to raise the lowest wage level and increase the regional minimum wages linking this task with the demand for a national uniform minimum wage system to be established. This approach has produced results little by little. In fact, regional minim wage increases, which used to be in the single digit range, have been more than 10 yen for the past several years, 14 yen in 2007, 16 yen in 2008 and 10 yen in 2009. Zenroren is now demanding that the minimum wage be raised to at least 1,000 yen per hour.

Wage increase is linked to expansion of domestic demand

In the 2010 Spring Struggle, Zenroren demanded that large corporations use a part of their internal reserves to improve the public. Major Japanese corporations have amassed 241 trillion yen in internal reserves, up 98 trillion yen from 10 years ago. Zenroren has said that the use of just a part of these internal reserves would make it possible to increase workers’ wages, shorten working hours, reduce the poverty rate and economic inequalities and overcome the Japanese economy’s heavy dependence on exports to move on to an economy led by expansion of domestic demand. This appeal by Zenroren has drawn media attention. Even among Rengo unions, some of the members of the Confederation of Private Railway Workers Unions in their wage negotiations demanded the use of a part of internal reserves for workers.

Prime Minister HATOYAMA Yukio has also indicated the possibility of making corporate internal reserves taxable.

Thus, Zenroren’s call for large corporations to use their internal reserves to the well being of the public has been shared widely.

ooOOoo

From Rodo-Soken Events

*January 31, 2010 - Rodo-soken published the report of its “Project on the Trade Union Movement in the 21st Century”.

*February 10, 2010 - Zenroren and Rodo-soken together held a study meeting on the campaign to demand that large corporations use a part of their internal reserves for public well being

*March 30, 2010 - Rodo-soken held a news conference to announce the publication of findings of a survey on the minimum cost of living in northeastern Japan. The survey was conducted on actual living standards, possessed property, and prices to estimate the minimum amount of cost of living.

Japan Research Institute of Labor Movement
(Rodo-Soken)

Rodo-Soken is a labor think tank that carries out research and studies on labor-related issues in cooperation with the National Confederation of Trade Unions (Zenroren), the national trade union center representing the class interests of the Japanese workers, in order to help advance the Japanese trade union movement theoretically as well as practically in response to the needs of the movement.

Japan Research Institute of Labor Movement
Rodo-Soken
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