Vol.37-No.07 July 1,1998
1.0 The Decline of Trade Union Density
Trade union density continues to decline in Japan. The unionization rate fell from 23.2 percent in 1996 to 22.6 percent in 1997. An overview of unionization rates over the past half century allows four distinct periods to be identified. The first period, from 1945 to 1949, was characterized by a burst of trade-union organizing activity. In 1949 the union participation rate reached its postwar high at 56 percent. From 1950 to 1960, union density then declined to around 32 percent. The third period between 1961 and 1975 was characterized by remarkably stable unionization rates, at around 34 percent. The fourth period starting in 1976 saw a further decline. After the first oil shock in 1974-1975 the Japanese economy fell into a deep recession, and the union participation rate started to decline. That decline has continued until today.
The reasons for the decline in union density in Japan after the oil shock have been discussed by a number of observers. Structural changes which have resulted in a growing proportion of Japan's employees being located in tertiary industry can explain only a part of the decrease in the union participation rate in Japan (Ito and Takeda 1990). Neither an increasing proportion of female and part-time workers nor a proliferation of management posts is the dominant reason for the fall in union density. Freeman and Rebick (1989) conclude that failure to organize workers in newly established firms is the most important reason for the decline.
Trade unions in Japan are losing their influence over industrial relations not only because the union density has declined, but also because many union members are no longer dependent on their trade union. The unemployment rate exceeded four percent this April. Job insecurity has come to be perceived as being one of the most serious problems confronting the Japanese employee. Union members naturally expect their trade union to protect them from dismissal. At this moment trade unions still have a voice concerning the job security of their members. But as the recession becomes deeper, management finds it increasingly difficult to protect the jobs of their members. Some union members are skeptical as to whether their union can ensure the security of their jobs.
Union members began to question the ability of unions in the mid-1970s, when union density started declining. The majority of large firms in Japan have a union shop agreement. Union membership within some period of time after being hired is compulsory and automatic. Even if members think they get very little benefit from their union, and want to quit in order to save membership fees, they are not allowed to do so. Many union members lose their interest in the union, and look on the membership fee they pay every month as something like a tax.
Because unions in Japan's large firms still have their members, they are financially sound. However, there is a danger that they will lose the loyalty of their membership. Some enterprise union leaders are acutely aware of how apathetic their members have become toward the union. They take the situation very seriously. In order to reassert the position of unions, many have participated in the union identity (UI) movement since the late 1970s. Until the first half of the 1970s, people believed that Japanese workers, especially those in Japan's large firms, were secure in their employment and that dismissals before the retirement age were rare. But the first oil shock and the subsequent recession revealed that even large companies would dismiss employees in order to survive. Union members expected their union would protect their jobs, but soon found that the union would at best only negotiate conditions for their resignations under a voluntary early retirement scheme. Many union members, especially younger members, lost interest in union activities for other reasons. They did not wish to participate in the various kinds of meetings organized by their union. Most enterprise unions experienced a drop in the participation of members in union meetings. A recognition of these kinds of problems and the change in their members' consciousness was the starting point for those who devised the union identity movement.
After the first oil shock, three major changes occurred in Japanese firms. One was in management strategy. During the period of high economic growth, most Japanese companies were able to expand their product markets. In the 1960s and the early 1970s people bought one product after another as they appeared on the market. However, the first oil shock forced many Japanese to accept that growth does not continue indefinitely. In addition to the slower growth of the market, the diversification of consumer demand and the introduction of more flexible technologies also contributed to the need for management to rethink the way it structured the workplace. Management came to rely more on part-time workers, and to restrict its employment of regular employees. Large firms that had command over an array of subsidiaries and subcontractors began to develop group-wide personnel management strategies in order to avoid dismissing employees outright.
A second change was the increase in the proportion of employees in white-collar occupations. Many of these employees were highly educated. Until the mid-1970s, it was not so difficult for union leaders to consolidate the demands of their members. The most pressing demands were for a wage increase and better working conditions. Thereafter, however, white-collar union members came to demand more than the improvement of their working conditions. They wanted their unions to have a say in various aspects of personnel management: the transfer of employees from one section to another, performance evaluation, job assignment, and so on. This made it difficult for union leaders to work equally for all members. Different members had come to demand different outcomes from their union.
The third change was in the maturation of industrial relations at the enterprise level. After the tremendous amount of industrial conflict in the 1950s and the early 1960s, management and unions tried to stabilize their relationship. The emphasis shifted from collective bargaining to the development of joint consultations in which management and the union could discuss a range of delicate problems. As the level of mutual trust rose, they began sharing secret information relevant to the management of the firm. In some companies the head of the union came to have access to sensitive data otherwise available only to a few top managers. However, the more delicate the information became, the more difficult it was for union leaders to explain the process of negotiation with management to their members. Union members found it increasingly difficult to understand transactions with management. It soon become difficult to know what was being won on their behalf and what was being given away to management. One result was that union members become more cynical about the negotiation process. Many lost faith in their leaders and came also to lose their interest in union activities.
Activities to promote union identity may be grouped into four categories: the altering of union symbols, the total welfare policy, moves to be more actively involved in the firm's decision-making process, and the organization of non-regular employees.
The alteration of union symbols includes (a) changes to the union's name (e.g., calling it the "XYZ Adventure Club"); (b) changes to the union flag (e.g. redesigning it and using blue rather than red as the main color); (c) redesigning the union's logo; (d) using plain words to explain the union instead of the traditional, ones which often come across as too abstract; and (e) the reform at of union newspapers, (e.g., using more illustrations and photos).
Table 1 shows how many unions have altered their symbols. These data were collected though a questionnaire survey organized by Inagami and his colleagues (1995). In 1993 secretaries from 1,050 enterprise unions returned the questionnaires (for a response rate of 46.5 percent). Nearly half of the unions were at firms in the manufacturing industry. Three fourths were at firms with more than 1,000 employees.
The most popular strategy was to reformulate the union newspaper. The newspaper is an important means of communication between union leaders and members. Few union newspapers had previously been attractive. Their pages were often filled with words. Few had illustrations or photos. Their overall appearance was rather bleak. Although they may have provided useful information, members often threw them away without reading any of the contents. In order to make union newspapers interesting, union leaders changed editorial policy. With many illustrations and photos and plain language, union papers are now much more appealing, and most members read them.
Table 1 also indicates when unions made their changes. One remarkable point is that about three fourths of unions conducted such reforms in the past two or three years. Some unions started UI activities at the end of the 1970s and the beginning of the 1980s. However, the majority of unions began to undertake these sorts of reforms in recent years.
A second focus of the UI movement has been the development of total welfare policies. In the past, most trade unions concentrated on improving conditions within the firm: higher wages, shorter working hours, and a better work environment. Trade unions sometimes organized events in which members' families were welcome to participate, but did not have a clear policy with regard to the members' total life. The UI movement also attached importance to the life of members outside their firm. One union came up with a slogan claiming that the union "took care of members and their families 24 hours a day." Union leaders became aware that the members would increasingly need the union to be involved in a wider range of activities. Accordingly, many unions have developed total welfare programs.
The third thrust of the UI movement has been to increase participation in the firm's decision-making process. Implementation of total welfare programs require cooperation with management. Without adjustments at work, it is impossible for members to satisfactorily restructure their lives away from work. According to Inagami (1995), 56.5 percent of unions that responded keep a voice on management policies.
A fourth pillar of the UI movement has been the organization of non-unionized employees. Japan's unions have usually limited their membership to regular, full-time employees. As long as enterprises recruited only regular employees, unions were protected by closed shop agreements, which compel regular employees to be union members. After the first oil shock, however, management began to employ more part-time workers who were excluded from most enterprise unions. Moreover, the number of managers was also increasing. Finally, employees working in group companies also tended to fall outside the purview of the union. In order to keep a voice in management, many trade unions started organizing such workers. Although these efforts to organize employees have been made only on a limited scale, it is noteworthy that some enterprise unions have sought to look after non-unionized employees.
It is hard to estimate at this moment whether the UI movement will succeed in stopping the decline in unionization rates. However, the preliminary findings of Inagami (1995) indicate that the movement has been able to reverse the overall decline in the interest of members in the union movement. When asked whether union members had become more interested in union activities over the past ten years, 36.5 percent of union leaders answered that members were less interested. Only 15.7 percent answered that members had became more interested, while 47.3 percent saw no change. Asked whether more members were now participating in events and meetings organized by unions, only 13.1 percent answered "yes." About 37 percent replied "no" and 49 percent indicated that there had been "no change." Asked whether their own union has succeeded in stopping the decline in interest among its members, 13.3 percent of respondents said "yes," while 65.5 percent said "no." These figures show that a large portion of Japan unions still suffer from a decline in the interest of their membership.
Recently serious problems have arisen from the UI movement. Union leaders are finding it difficult to make sufficient time available to discuss and to plan long-term union policy because they have to spend so much time maintaining their total welfare policies. Many unions are now having to maintain programs that have been designed for members and their families. It is easy to start such programs, but it has been difficult to cull such programs. Now the number of such programs is very large, and it takes a lot of time to manage them. Some unions have begun to monitor their programs in an effort to determine which ones deserve high priority. By culling their programs, union leaders hope they will be able to spend more time in long-term planning.
The union movement in Japan faces a number of serious problems. One is the decline in union density and rising apathy of members toward their union's activities. In order to tackle this problem, many unions have been conducting UI activities. The outcomes are still uncertain.
The fall of union density derives mainly from the inherent shortcomings of enterprise unionism. Enterprise unions have in the past concentrated their efforts on problems specific to the firm, and have not devoted many resources to organizing non-unionized workers. It neverthelessshould be noted that a few unions like Zensen Domei (The Japanese Federation of Textile, Garment, Chemical, Commercial, Food and Allied Industries Workers' Union) and Zenkin Rengo (The Japan Federation of Metal Workers' Unions) have been striving to organize new workers. But such unions are too few, and the unionization rate in Japan will probably continue to fall.
Here it might be useful to consider the possibility of corporate governance through union activity. Some unions have gained a relatively strong position against management by actively engaging management in joint consultations. It is sometimes difficult for outside observers to evaluate ways in which trade unions have a say in changing management policy, because the discussion in consultation committees is kept confidential. However, interviews with union leaders conducted by this author suggest that some unions have a voice in decision-making and are able to ensure that management policies are in the interest of their union's members.
In Japanese firms, unlike in U.S. firms, neither shareholders nor outside directors have a strong voice. The function of checking management policies was carried out by Japan's main banks until the late 1970s, but since the mid-1980s their role has gradually decreased. Consequently, chief executive officers in Japanese companies have unchecked power to make decisions. The lack of countervailing power poses a serious problem for corporate governance in the event of managerial misconduct. Accordingly, unions might be the last resort for checking top management policy-making. To the extent that Japanese unions engage in this type of activity, we may be witnessing the emergence of a new form of corporate governance.
|Freeman, R.B.; and Rebick, M.E. (1989). "Crumbling Pillar? Declining Union Density in Japan" Journal of the Japanese and International Economies (vol. 3), pp. 578-605.|
|Inagami, T. (ed.) (1995). Seijuku Shakai no Naka no Kigyobetsu Kumiai (Enterprise Unions in a Mature Society) (Tokyo: The Japan Institute of Labour). Tokyo.|
|Ito, M.; and Takeda, Y. (1990). "Rodo Kumiai Soshikiritsu no Suii to Sono Henka Yoin" (Change in the Union Participation Rate and Reasons for the Change). Rodo Tokei Chosa Geppo (Vol. 42, No. 6), pp. 6-14.|
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