No.26,April.1999

JCP's Major Advance and its Impact on the
Labor Movement

By Ikuya Nishikawa

      One hundred fifty years after the publication of "the Manifesto of the Communist Party" came around. We can see the major changes in the heavily developed industrialized county of Japan. It is the Japanese Communist Party that creates the political change now. The highly polished culture of the JCP becomes the center of interest in this county. Having prospects of the 21 Century, the world could not ignore the Japanese situation.

      The JCP energetically carries forward its activity. What makes the JCP so vigorous? And, what impact has the JCP's advance had on Japan's labor movement? In this article, I want to discuss these questions.

JCP's Leap Forward in Various Elections and its Background

      April this year in Japan was a time of elections for local assembly members, which takes place every four years nationwide simultaneously. The Japanese Communist Party achieved a major advance in these elections, following its advance in the Tokyo Metropolitan Assembly election two years ago and in the House of Councilors elections last year.

      "JCP Wins the Biggest Number of the Seats, More than 1,000 JCP Candidates　Elected in the City Assembly Elections," "JCP Marks the Highest Record,"　"JCP Attracts Non-Party People," "JCP Continues to Advance," "Vote for LDP　Falls." These are the headlines of commercial newspapers published on the　following day of the elections. All newspapers not only gave a big write-up　to the JCP's great advance, but also pointed out the decline of the Liberal　Democratic Party, the political party in power.

      Now, let us examine how big advance the JCP made in the recent local assembly elections.

      The first half of the simultaneous local elections were mainly for prefectural assembly elections (this does not mean that all the prefectures had elections.) In these prefectural assembly elections, the JCP increased its seats by 50 percent, from 98 to 152. In the second half of the election battle, which focused on ordinary city assemblies, the JCP succeeded in getting its 1,033 candidates elected, bettering its best record, 972. By hitting the 1,000 marks, the JCP now holds a higher position than the LDP with　regard to the number of city assembly members.

      With these achievements, the JCP outdistances the other parties in the total number of local assembly members (those reelected and not reelected this time putting together.) It now has 4,413 local assembly members, the highest record in its history.

      On the other hand, the LDP got the lowest number of seats in its history in prefectural assembly elections. In the city assembly elections in the second half of the elections as well, the LDP decreased its seats from 975 to 881, namely lost 94 seats. As the result, the JCP rose to the second party in the city assemblies, the LDP slid down to third.(* See the table below.)

Number of Winners in 44 Prefectural Assembly Elections
	winners	incumbent	former	new	female	winners in 1995
JCP	152	76	8	68	56	98
LDP	1,288	1,146	18	124	5	1,304
DPJ	170	113	6	51	17	-
Komei	166	125	0	41	11	160
LP	20	13	0	7	1	-
SDP	94	75	5	14	8	282
Sakigake	2	1	0	1	0	9
Others	79	61	1	17	8	223
Independent	698	357	34	307	30	623
Total	2,699	1,967	72	630	136	2,699

Number of Winners in 11 Largest City Assembly Elections
	winners	incumbent	former	new	female	winners in 1995
JCP	120	78	8	34	45	92
LDP	233	209	3	21	5	240
DPJ	114	93	2	19	15	-
Komei	132	101	0	31	18	128
LP	1	1	0	0	0	-
SDP	15	13	0	2	1	99
Sakigake	0	0	0	0	0	3
Others	42	28	1	13	25	118
Independent	122	87	5	30	8	105
Total	779	610	19	150	117	785

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(Notes)

JCP = Japanese Communist Party
LDP= Liberal Democratic Party
DPJ= Democratic Party of Japan
LP = Liberal Party
SDP= Social Democratic Party

      The figure (Others in winner in 1995) includes some of the winners who belonged to a political party that no longer exists, and includes winners from Hyogo Prefecture and Kobe City, where the poll was postpones because of the Great Hanshin Earthquake.



      Such a trend in the political front is absolutely not something that just happen to emerge.

      In 1989, the rightward move to reorganize Japan's labor front found a certain conclusion by the formation of two national centers: the National Confederation of Trade Unions (Zenroren) and the Japanese Trade Union Confederation (Rengo.)

      The difference between the number of the seats and votes that political parties obtained then, and that of the today clearly shows what political 　change Japan has had so far.

      In the House of Representatives Election in February 1990, the LDP won 275 seats with 30,315,000 votes. However, in the House of Representatives Election in October 1996, it only obtained 211 seats by 18,205,000 votes, 12 million less than the votes it won in the previous election. Also, the Socialist Party, which used to lord it over Japan's working class by "obligating them to support a specific political party,"obtained 135 seats with 16,457,000 votes in the 1990 election. But this time it suffered a serious defeat with the number of its seats slipping down to 15, and the votes obtained, to 3,547,000.

      In contrast with these two parties, the JCP, which only obtained 16 seats by 5,226,000 votes in 1990, made a leap forward in the 1996 House of Representatives Election, increasing its seats to 26 with 7,268,000 votes. The JCP continued to advance. In the House of Councilors Election in July 1998, it built up a footing for bigger advance by winning 8,195,000 votes. These series of its victory made a background of the JCP achieving victory in the recent simultaneous local elections.

      Now, why the LDP and the SPJ (the named now changed to the Social Democratic Party of Japan) have faced a drastic decrease in the number of their seats, while the JCP achieving a rapid increase in votes obtained during the past ten years?

      Since the 1980's, the government, the Liberal Democratic Party and the financial circles, have pushed ahead with the administrative reform to serve major companies' interests, by setting up such bodies as the second Ad Hoc Commission on Administrative Reform. Through this reform they carried out all-out adverse revision of the medical and pension systems. They also drastically reduced the budget for education and increased tax through introducing a value-added tax. They pushed forward the policy of liberalizing the import of agricultural products including staple food of rice.

      On the other hand, they thoroughly promoted large-scale public projects that only benefit the major general construction companies. All these resulted in politics in which the government allocates in the national budget 50 trillion yens (or US$480 billion) to public projects and 20 trillion yens to social security. Such politics, what is called "upside-down politics," imposes a great sacrifice upon the people and has no parallel in other developed capitalist countries.

      Naturally, those policies are expected to meet an intense resistance from workers and people.

      To hold such resistance in the bud, the LDP and the financial circles drew up two strategies. One is to realign the political world to absorb all the opposition parties except the JCP into the ruling party. And the other is to reorganize the labor front rightwards.

      The Socialist Party of Japan, the first opposition party then, did not fight against the LDP policies but to form a coalition government with it in June 1994. The then SPJ head Tomiichi Murayama, who assumed the　Prime Minister, completely turned around the party lines that the SPJ had　maintained. The SPJ now took the course of integrating itself with the LDP　in word and deed under the basic policies to "approve the Japan-U.S. Security Treaty and recognize the Japanese Self Defense Forces as constitutional." The SPJ's change ran counter to traditional points of view of Japanese working class. The workers have opposed the Japan-US Security Treaty as another version of US's military occupation and protested the Japanese Self Defense Forces as a compliment force to US.

      LDP "upside-down" politics rapidly deepened contradictions with various sectors of the people. In particular, the introduction of the consumption tax or the value-added tax gave a great damage to small- and medium-sized enterprises, and the liberalization of the import of rice seriously hit farmers. These sectors used to make up a strong base of support for the LDP, but they swiftly started to alienate themselves from the LDP.

      It is also a foregone conclusion that the SPJ, which came to side with the LDP to promote the LDP politics at the cost of the people, became the target of a severe criticism of workers and people.

Conditions for the Progress of Labor Movement Created

      The major basis that had enabled the SPJ to maintain a strong influence over Japan's labor movement in the post　World War II was the policy of obligating trade unions to support the SPJ based on anti-communism.

      Now that the SPJ became an LDP partner, as I have mentioned above, workers in a stroke started to quit supporting the SPJ and other social democratic parties. This has led to the decline of these forces.

      The decline of the social democratic forces in the political front coincided with the process that the obligation of support for a particular political party, which had been a major obstacle to unity of workers and unification of the labor front, failed in name and in reality. This is because workers in many workplaces began to question why they had to be mobilized in the electoral campaign for a particular party, while its policy oppressed their rights and destroyed their life. New conditions have now created that all the workers can be united based on urgent demands. They have expanded objective conditions in which trade unions of different trends can wage a common struggle based on the agreed demands and tasks.

      In contrast with the declining social-democratic parties, the JCP has rapidly developed its influence among workers. They have turned to give the big support to the JCP as the real opponent to LDP's bad politics. They also appreciate the JCP's policy to fight for protecting people's sovereign. With this, what is called an "anticommunist fence," another major obstacle to cooperation between trade unions has started to break down at a stroke.

      The changes in Japan's political front today that I have explained so far, have created and developed unprecedented scale conditions for unifying the labor front in accordance with the primary and fundamental principles of the trade union movement.

      Japan is no exception to the merciless impact of the global industrial reorganization.

      Major companies carried out a large-scale personnel reduction one after another, such as 17,000 of Sony, 6,500 of Hitachi, 2,000 of Toshiba, 3,000 of Mitsubishi, etc. This in turn has seriously affected small- and medium-sized enterprises. Japan's unemployment rate at last marked 4.8 percent in　March this year, hitting the worst-ever record since the start of the survey　in 1953. The number of the jobless people reached 3. 39 million, 620,000 up from the level a year ago.

      An important feature of the situation is that major companies are promoting restructuring and target at workers of all sections, including those in the middle echelons and youth.

      On top of employment uncertainty, the adverse revision of social security systems such as medical service and pension, and the increase of the consumption tax rate, have made all the workers more and more worried about their future.

      The dramatic changes in the political front, coupled with such a reality of workers, have certainly given a push to the united struggle of workers based on the urgent demands. In last year's struggle to oppose the adverse revision of the Labor Standard Laws, neutral and independent trade unions, and not a few workers and unions affiliated with "Rengo" cooperated with unions affiliated with "Zenroren" to take up a joint struggle in workplaces and localities. At the central level too, they virtually formed a common front.

      Recently, there have arisen various kinds of struggles to scrap the controversial bills related with the new Guidelines for Japan-U.S. Defense Cooperation, whose aim is to make it　possible for Japan automatically to participate in the war started by the　U.S. In these struggles, twenty trade unions of land, sea, and air transport industries are　united beyond the difference of the national centers.

      On the eve of the 21st Century, being inspired by the dramatic changes in the political front that call for a progressive reform, Japan's labor movement shows the strong signs of advancing toward a grand common struggle based on　agreed demands.

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Vice Chair, the National Confederation of Trade Unions (Zenroren)

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60 Trillion Yen Public Funds to Bailout Banks, and
Their Restructuring Plans

By Hitoshi Tanaka

1. Restructuring Carried out at the Sacrifice of Workers

      On March 30, the Japanese government granted financial assistance 　that totaled 7,459.2 billion yens to the 15 major banks through preferred　stocks and subordinated loans. The government alleged that these measures　aimed to help the banks offset their enormous bad loans, and thus to　eliminate the financial uncertainty and to overcome the serious economic　recession. The 7,459.2 billion yens are parts of the 60 trillion yens the government prepared to bailout the banking industry. This colossal amount of public money will save the banks, but not the workers employed by them, The result will be to the contrary.

      The government demanded as a condition for injecting public money that each bank should draw up a plan for making the fiscal administration sound, urging them to carry out all-out streamlining, workforce reduction and cut in the personnel expenses. To meet these requirements, the 15 major banks that are going to receive the financial assistance have made public their restructuring plans, which include cut in the personnel expenses by 11.4 percent on the average by reducing workforce 13.8 percent (19,600 workers) for the year 2003.

2. Further Drastic Restructuring Plan after Slashing the Workforce by 30, 000 in Four Years

      I must underline here that the Japanese banks, especially the major ones, have already carried out thorough streamlining, and that they are going to push ahead with the planned reduction of workforce and personnel expenses on top of what they have achieved. For example, city banks had 183,000 workers in the latter half 1970's, and they reduced the number down to 152,000 by the end of 1980's.

      The introduction of new technology, including the new online system, enabled such a drastic reduction in the workforce carried forward during 1980's. Also, the drastic personnel reduction then resulted in far heavier burdens on bank workers than before. The banking industry, the major banks in particular, is the one among other the Japanese industries that has pushed forward streamlining and personnel reduction most severely.

      Consequently, bank workers in many workplaces are so busy that they even do not have time to have lunch, and to work until late at night almost every day. Such working conditions have caused tragic incidents; for example, a 22-year-old female worker of Fuji Bank died of overwork. This terrible reality of labor in the banking industry has become a social issue. Pressed by the denunciation from bank workers and their families, labor standards inspection offices conducted a nationwide investigation on the actual labor conditions of the banks. The Diet also took up the results. The authorities concerned issued directions to the banking management for correcting illegal personnel management, and sent the unprincipled managers to the prosecutors office.

      Such a social criticism in part gave a push to the banking industry to increase the workforce; the number of bank workers shifted to increase, though slightly, at the beginning of 1990's (the number of the city bank employees increased by 4,000 to reach 158,000 in 1994.)

      However, in the latter half 1990's, with the prolonged recession originated from the collapse of the "bubble economy," the financial institutions faced an aggravated fiscal crisis. The government had already injected public money twice, in 1996 and 1998 to bailout the financial institutions. Each time, it pressed the banking management to conduct restructuring that included slash in the workforce and wages.

      In such a situation the number of city bank workers again turned to decrease. The banks largely cut down the number of their workforces from 158,000 of 1994 to 128,000 of 1998. After having cut most workforces, they are still going to reduce it.

      In the present restructuring plans, bank workers will not only face the loss of jobs by the personnel reduction, or the increased labor intensity for those survived the reduction. For the past few years the banks have repeatedly revised the wage system. The previous wage system of the major banks tended to give importance on workers' ability, but the seniority-based factor was applicable for the workers faithful to the banks.

      In a new wage system that they are to introduce, the bank authorities unilaterally determine the grades in each duty, and fix the wage of each grade in a certain range. Within the range, the banks decide the wage for each worker according to the valuation. In deciding the duty grades and wage, they never consult with trade unions. In the new wage system, the change of duty according to the transfer of workers carried out unilaterally by the bank authorities means the change of wage as well. What is more, the same duty does not mean the same wage; if the authorities' valuation on the worker's achievements changes, the wage also changes.

      Most important, this new wage system suggests the possibility of wage-cut in future. In these 50 years since the end of the Second World War, Japanese banks have revised the wage system several times. These revisions were to change the seniority-based wage system, in which wage automatically increases in proportion to the length of one's service, into another that bases on one's ability, that is, they would regulate the margin of wage increases by the ability valuation.

      These revisions of the wage system to change it into the ability-based one, sometimes resulted in oppressing the margin of wage increase according to the ability valuation, or in reducing the wage at the same level. The ability valuation, which had no objective standards, caused various problems. However, none of the previous revisions implied the possibility of wage cut as the present revision does. The present revision of wage system will radically change the wage for bank workers.

      Wage cut has already started. The annual wage of bank workers consists of monthly regular wages and allowances paid twice a year in June and December. The two annual allowances have held a greater part in the annual wage. The city banks have paid about a sum equivalent to 6.5 months' regular salary on the average. Last December, they cut the allowance by 12 to 30 percent of the previous year's level, No doubt that they will cut the allowance in June this year as well. They intend to force the reduction in the whole annual wage by almost 20 percent.

      City banks have not increased the regular wage for these four years. The planned drastic cut in the allowances under such a situation will greatly affect the workers' livelihood.

      The banks supposed to receive the assistance from public funds have presented the government plans for making the fiscal administration sound. The plans show how each of them is going to carry forward the restructuring. For example, Sakura Bank's plan for strengthening the financial administration puts forward the workforce reduction from 16,700 of March 1999 to 13,200 in 2003. It will at the same time change the wage system and cut the allowance, so that it will be able to slash the personnel expenses from 179.9 billion yens in 1999 to 152.1 billion yens in 2003. Dai-Ichi Kangyo Bank will achieve the cut in personnel expenses from 165.8 billion yens in 1999 to 138.3 billion yens in 2003, by reducing its workforce from 16,130 to 13,200 in the same period.

3. The U.S. Government's Message to the Restructuring of Japanese Banks

      Why should the injection of public money to bailout banks require them to carry out restructuring at the sacrifice of the workers? The government's logic is that the banks' colossal sum of nonperforming loans is the cause of the serious recession, and therefore it uses public money to help them offset such loans, which will in turn promote economic recovery. It alleges it is only a matter of course that banks should do their utmost to strengthen the fiscal administration, because they receive public funds to write off their bad loans. It considers the reduction of bank workers and their wage as a logical consequence.

      By the way, is this policy of disposing bad loans by injecting public funds really the Japanese government's own idea? In September last year, confrontation between the ruling and the opposition parties came to surface over the discussion on the financial resuscitation bills, which provided the basis available to public money to save banks today. It was the time when the U.S. government repeatedly called on the Japanese authorities to swiftly infuse public money into banks and to increase the sum of such money. The world economy at that time had become extremely unstable, due to the economic crisis of Russia. Regarding Japan's financial resuscitation law, the U.S. Treasury Secretary Robert E. Rubin stated in the House of Representatives Committee of Banking and Financial Service that there was no doubt that Japan is in the center of the present crisis of world economy. He also said that cooperation between the ruling and opposition parties was necessary for providing sufficient public funds, and that the world was watching it. With these words he called not only on the Japanese government but also on the opposition parties to cooperate on this issue.

      They drew up Japan's financial policy influenced by the strong will of the U.S. but it is doubtful that this policy will fundamentally recover the Japanese economy. Each bank's plan for making the fiscal administration sound focuses on how to consolidate its competitiveness in the further deregulation process, and on how to strengthen the business connections with leading companies and men of property. We cannot find any measures to revitalize local economy or to encourage small- and medium-sized enterprises, the two factors that support the Japanese economy from at the base.

4. Banks Restructuring Entering the Second Stage

      Banks' restructuring started with the injection of public funds for major banks and completion of the plan to strengthen the fiscal administration. They are finishing this first stage, now passing into the next one. The second stage is the selective realignment of regional banks, which carry on the locality-based business, and small- and medium-sized financial institutions such as credit associations. The Financial Reconstruction Commission's decision on April 11 to deal with the failure of Kokumin Bank turned out to be the pronouncement of the bank's restructuring entering the second stage.

      The news of Kokumin Bank's failure released in the Nihon Keizai Shimbun of April 8 led the customers to pour in to withdraw their deposit. This resulted in an enormous deposit outflow in a short period, which gave a reason for the Commission's decision to deal with the failure. The source of that Nikkei Shimbun's report was an inside information from the administrative authorities, and it is very much likely that they deliberately leaked the information. Immediately after the Nikkei Shimbun's news release on April 8, the administrative authorities ousted the bank's former management and sent financial custodians to the bank to put it under their control. We can say that with this they showed their firm determination to carry out the realignment of small- and medium-sized financial institutions.

      The Finance Resuscitation Law provides that financial custodians should be sent to the financial institutions certified as bankrupt. They say that the government has already listed 100 custodians from lawyers, certified public accountants, etc. They probably push ahead at an unprecedented tempo the realignment of small- and medium-sized financial institutions, by dealing with the failure of the rest of such institutions in the same way as they did to Kokumin Bank.

      Will such a realignment of small- and medium-sized financial institutions help toward revitalizing the Japanese economy? The answer is, "very doubtful," Because they have decided the procedure for dealing with bankruptcy and realignment of small- and medium-sized financial institutions, but have not clearly determined how to secure the customers, that is, capital supply, for such institutions.

      Noteworthy moves took place over the decision on the measures to deal with Kokumin Bank's failure. Kokumin Bank employees' union on the spot took up the fight to secure the employment of all the 730 workers, and to ensure the loans for the 26,000 customers. The bank's management also stood up; 110 of the 128 in managerial posts formed a union for administrators, and started the campaign to achieve the same demands as the employees' union. Since all the bank workers except the administrators are union members, most of the employees of Kokumin Bank are mobilized in the movement to oppose the government's measures to deal with the bank's failure.

      In Osaka too, the administrative authorities promote the plan to merge and reorganize the 13 credit associations into 3. In this plan, they will dismiss all the workers of the 10 credit associations that are to be merged, and will only employ the number of workers necessary for the new 3 credit associations. Against this plan, 97 workers of the credit associations to be merged sued to the Osaka District Court with the support of many trade unions, calling for their employment to be secured.

      The second stage of the banks' restructuring is now facing a new counterattack from workers, the victims of the restructuring imposed upon them.

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The Research Institution for Bank Employees (GIN-RO-KEN)

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Publication of Workers' Struggles of The World,
Annual Report, 5th Edition,1999

      The National Confederation of Trade Unions (Zenroren) published in March 1999 the fifth volume of "Workers' Struggles of the World." This is an annual report of the trade union movement of the world, written by investigators, who are members of International Labor Section of the Japan Research Institute of Labor Movement.

      The fifth volume consists of 150 pages covering the labor movement in sixty-two countries and one region (except Japan.) It has twenty-three pages and ten countries more than the fourth volume published in March 1998. Compared with the first volume issued in February 1995, a great advance has been made. We can say that this is the reflection of the fact that workers have strengthened their struggle in respective countries, and consequently the struggle has expanded to different parts of the world. In the fifth volume, they collect and analyze trends and information not only of industrialized countries but also of developing countries as far as conditions permit.

      Since it is for Japanese workers, activists and investigators, the report is written in Japanese and does not have an English version.