The collapse of the department store operator Sogo Co. came as a shock to Japan’s recovering economy. Even more shocking are reports that the company’s union leader has been fired for disrupting “order” in the organization.
Sogo did not give any specific reason for dismissing its union boss. According to newspaper and magazine reports, however, he misused company expenses and spent union membership dues for private purposes. Reports also say he was close to former Sogo Chairman Hiroo Mizushima, who was forced to resign for having mismanaged the company.
Corporate management is checked by shareholders’ meetings, auditors, certified public accountants and main creditor banks. It has been pointed out, however, that these checking mechanisms did not work properly in many of the corporations that went bankrupt or caused scandals during the recent recession.
Unions that maintain a proper degree of tension with management can help prevent abuses on the part of management. Sogo’s union, however, had no such restraining influence because the union leader reportedly had cozy ties to Mizushima and sought his own personal gains.
In the past, Japanese companies had large numbers of surplus workers — “in-house unemployed” — in order to maintain the lifetime employment system. Corporate Japan, it was said, was putting employee benefit before shareholder interest.
But the current restructuring boom clearly shows many companies are willing to lay off workers. An executive explains the trend this way: “Cutting jobs used to be taboo in Japanese society. Now, however, there is no such social inhibition.”
In hard times such as these, unions should be a bastion of support for rank-and-file workers. In reality, however, workers are generally unwilling to resolve their problems through their unions. According to a survey released last year by the Japan Productivity Center for Socio-Economic Development, only 14.9 percent of workers took their complaints to their unions, compared with 57.7 percent who sought help from their superiors.
Statistics indicate, however, that the number of disputes between individual workers and their employers has increased sharply in recent years. Last year, labor offices across the nation received 13 times as many complaints than they did five years earlier, while equal job opportunity offices handled about twice as many grievances.
Japanese unions have not only lost the trust of workers, but they have also received little attention from management as well. Looking back, labor and management frequently clashed in the 1950s but established a cooperative relationship in the 1970s. That relationship supported Japan’s economic prosperity in the 1980s.
However, as unions became more conciliatory toward management, the role of company-based labor-management councils declined. As a result, attendance from the management side dropped markedly.
Meanwhile, union posts went increasingly to members with a college degree. As a result, experience as a union official became a de facto requirement for promotion to management positions. So union officials tended to act in favor of management, not union members. In the background is the flawed company-union system.
Working conditions in Japan have deteriorated so much over the years that they cannot begin to compare with those in other industrialized nations. For example, the spate of lawsuits over “karoshi”(death from overwork) has turned a spotlight on so-called service overtime, which means doing overtime without pay. On average, nearly half of annual paid leave is left unused.
Workers with large companies that went bust during the latest recession complain, and with good reason, that their unions were of little help. The lack of union power made things worse particularly for companies in the services sector, such as distribution and finance, where unions are traditionally weak. By contrast, the manufacturing sector, where unions are strong, emerged from the slump with much less damage.
All in all, a lack of tension in labor-management relations seems to have contributed to loose management and thus weakened the ability to withstand this country’s worst postwar recession. Kumagai Gumi, the major construction company that is asking creditor banks to forgive an enormous amount of bad debt, is said to have no union.
The unionization rate has continued to fall, reflecting the growth of the service sector and the expansion of the part-time workforce. According to the Labor Ministry, the estimated rate of unionization has followed a downward curve since 1949 when it reached an all-time high of 55.8 percent. In 1999 it stood at 22.1 percent.
In order to stem the slide in union membership it is necessary, first, to take in more female and young workers. According to a poll taken last year by the Rengo labor federation, women made up 21.6 percent of the total union membership, and more than seven in 10 unions had no female officers. More women should be appointed to union posts to correct gender inequalities in such areas as pay raises and promotions.
There is also a need to organize part-time and temporary workers so that unions will pay more attention to disparities in wages and other conditions of employment between regular and nonregular employees.
With the collapse of the seniority wage and lifetime employment systems, company unions — which are part and parcel of these traditional systems — stand at a crossroads. The role of the “shunto” spring labor offensive has declined steadily in recent years. Two years from now, Nikkeiren, the Federation of Employers Associations, will be absorbed into Keidanren, the Federation of Economic Organizations.
The labor subdivision of the Liberal Democratic Party’s Policy Research Council proposed in March that the checkoff system — whereby union membership dues are withheld from wages — be prohibited by law. The proposal, which was aimed at Rengo, the largest labor group that supports opposition parties, fell through because of strong objections from opposition parties as well as Rengo and other labor groups.
In France, where the checkoff is prohibited by law, unions are said to be among the most militant in Europe. They often resort to tough tactics, such as massive walkouts. Unions in Japan should make concerted efforts to bolster their organizations and win the confidence of their members.
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