Work Sharing, the First Important Labor Topic of 2002

Newspapers in the opening days of 2002 were filled with articles that reviewed the accomplishments of Prime Minister Koizumi in his first eight months in office and focused on prospects for reform and economic recovery.

With the economy in a mildly deflationary and lingering recession and with the labor market sputtering as a result, there is little reason to believe that the Shunto spring labor negotiations in 2002 will result in significant wage increases. Because of this, attention in the labor market has turned to work sharing.

As reported in these pages in November (see JIL Labor Flash Vol. 8), Rengo and the Japan Federation of Employers' Associations (Nikkeiren) announced a "Social Consensus on Employment" in October to commit themselves to establishing a basic framework regarding work sharing. The two organizations agreed to set up a study group by March of this year to begin specific steps for establishing such a framework, but because Rengo's and Nikkeiren's positions differed significantly, most experts were skeptical that anything concrete would emerge. In December, under the leadership of Health, Labor and Welfare Minister Sakaguchi, a government-labor-employer work sharing study conference was held to initiate discussions aimed at leading to a broad framework for agreement.

Subsequent developments have served to bring the government, Nikkeiren, and Rengo closer. With the government unable to provide definite solutions, the employment situation has continued to worsen. Large-scale employment cuts by the corporate majors have put into doubt Nikkeiren's ability to show leadership and convince companies that they must maintain employment. Rengo wants desperately to put a stop to developments that will lead to an even smaller percentage of union membership.

Therefore, when Rengo went on record that it will accept lower overall wages as a result of shorter working hours, significantly altering its position regarding this issue, discussions on work sharing suddenly became more real.

During this time, Fujitsu announced that it would introduce work sharing arrangements at its semiconductor plants next fiscal year. Sanyo also announced that it has agreed in principle with its labor union that it will introduce a work sharing arrangement in which it will reduce work hours per employee and cut a part of their salary, but maintain employment. The Japanese Electrical, Electronic and Information Union (Denki Rengo) also decided that it will propose the introduction of work sharing arrangements that incorporate longer-term layoffs and more diverse work shift arrangements at this year's Shunto labor negotiations.

Although the number of companies that have decided to introduce work sharing has not increased significantly, it is clear that work sharing now offers a new and viable alternative to massive job losses.