Vol.37-No.01 January 1,1998
A major characteristic of this year's offers was in the variation among firms based in the Kanto region. Although the firms had each year offered the same multiple since 1987, this year Fujitsu and NEC (which had enjoyed relatively strong earnings) maintained last year's multiple in offering bonuses equal to 5.10 months of the monthly base salary. However, other large companies such as Hitachi, Toshiba and Mitsubishi Electric offered bonuses equivalent to only 5.06 months pay, down from the previous year's level. This variation in offers among companies based in the Kanto region occurred for the first time since 1986. Matsushita Electric Industrial Company, Sanyo Electric and other companies based in the Kansai region normally pay larger bonuses than those in the Kanto region. Their average this year was 5.25 months of the monthly base salary, the same multiple as in 1996.
Labor unions had requested an increase in bonuses equivalent to 0.1 month's base salary. When they began to formulate their demands in July, the 17 major companies were expected to achieve an annual rise of 15 percent in their pretax profit for the current year to March 1998. However, the business outlook later worsened, as a result of dampened sales of home electronics appliances due to the rise in the consumption tax from three to five percent in April. The home electronics appliances sector was also affected by cuts in capital investment in the electric power industry. Nevertheless, sales of information-communications equipment, especially mobile phones, tended to increase the revenue of the industry.
In this regard, it should be noted that high-bonus companies such as Fujitsu and NEC draw a larger proportion of their sales from information-communications equipment than do synthetic firms like Hitachi and Toshiba. With some of the Asian nations rapidly catching up in electronics, the industry in Japan is now restructuring itself to maintain its international competitiveness. In the wake of this situation, the industry federation Denkirengo (Japanese Electrical Electronic Information Unions), has adopted a policy whereby all firms in the industry assure their employees the same wage levels and reflect variation in business results in the payment of bonuses. The union's stance has come to be that variation in bonuses is inevitable.
An increasing number of labor unions are facing financial difficulties due to the drop in union dues stemming from the decline in the number of union members owing to downsizing. Accordingly, more unions are withdrawing from strike funds as one means of coping with their financial crisis. Those were the findings published in September by the Institute for Social Affairs in Asia (ISAA). The institute had conducted a survey in 1995 on union dues among 513 unions (mostly enterprise-based unions) under the umbrella of Rengo (the Japanese Trade Union Confederation). According to the survey, union dues averaged 4,797 yen (approx. US$38) per person, up 45 yen (approx. US36¢) from the previous survey in 1993. The amount of revenue received into the general account for day-to-day union activities averaged 308.61 million yen (approx. US$2468,000) per union, down 6.71 million yen (approx. US$53,000) from 1993. Decreases in union members due to downsizing was reflected both in the drop in overall revenues and in the rise in per capita union dues.
Nearly 80 percent (79.8%) of the unions surveyed have established a special fund for strikes, apart from general accounts. Strike funds averaged 7.586 million yen (approx. US$5,600,000) enough to cover 17.6 days of lost wages when the union were to go on strike. Nearly 30 percent (29.9%) answered that they would use the strike funds for other purposes than covering lost wages. Although plans for how strike funds would actually be used are unknown, the institute surmises from interviews with union officials that the unions are using such funds to make good shortfalls in their general accounts. There has been a continuing drop in the number of strikes since 1981. In 1995, the unions called 685 strikes which resulted in a loss of 76,971 workdays. Those figures compare with 3,783 strikes and 1 million and 1,224 workdays lost in 1980 (according to the Ministry of Labour's statistics on labor disputes). This situation has allowed unions to reallocate their strike funds in order to make up for tighter general accounts.
The austerity of union finances is also manifested in the decline in the number of full-time executive officers and staff. The number of full-time executive officers and staff members per industrial union fell by three from the previous survey to 15.9.
*125yen = $1 (as of Dec. 14, 1997)
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