2003 Spring Joint Labor Negotiations get under way

A new year, 2003, has begun. However, what we see in Japan today is the unemployment rate stuck at a high level, and a shockingly large number of homeless people sheltering in urban parks (despite the popular belief that Japan is an affluent country). Many workers are worried that they, too, may lose their jobs one day. It is little wonder that, with the start of a new year, everyone is hoping for a return to the happier days of society and business filled with hope and vigor.

The spring joint labor negotiations got under way slowly amid widespread concerns that a deflationary spiral may set in.

At its Board of Directors' meeting in mid-December, the Nippon Keidanren, or the Japan Business Federation approved the Management, Labor Policy Committee Report which corporate managers would use as their guidelines for the upcoming spring joint labor negotiations. The said report follows up on the Labor Issues Study Committee Report released by Nikkeiren, or the Japan Federation of Employers' Associations prior to its organizational merger with Keidanren in May of last year.

The report discusses the issue of how wages should ideally be set, and stresses that basic pay raises are out of the question. Freezing and/or reviewing of annual wage increases may be covered in labor-management talks. The report also states that the style of spring joint labor negotiations has changed drastically. Gone are the days when labor unions took the initiative in establishing wage hike demands, and fought to have them met, sometimes using force, with the intention of involving all levels of society. With corporations suffering steep declines in their wage-paying capabilities, moreover, the report strongly suggests, they need to cut employee wages for the first time ever. At the same time, it contends that, to stimulate the growth of high value-added industries, companies should fortify their management structure by lowering their share of labor costs.
As expected, the report was sharply criticized by labor.

Rengo stated that the spring joint labor negotiations would play an increasingly important role, since the negotiations aim at enhancing the labor conditions of all workers, including part-time workers, and at extending this positive outcome to profit the whole of society, from the perspective of improving people's livelihoods and standard of living. Rengo criticized the report as being contradictory: while diagnosing the economy as currently suffering a "consumption recession," the report stated that demanding across-the-board wage hikes was out of the question. Rengo also stressed the key role that corporations should play in economic recovery, indicating that personal consumption would not recover unless people's anxieties about deteriorating labor conditions were allayed (by maintaining the wage curves).

Zenroren also criticized the report, saying that it is extremely unfair to increase employment insecurity through drastic downsizing of labor on the one hand while taking advantage of this uncertainty to pressure corporations to further reduce employee wages on the other.

A majority of medium- to long-term economic forecasts released recently by major private-sector think-tanks predict that it will take another few years for the Japanese economy to bounce back. For the time being, the think-tanks predict that, with disposal of nonperforming debts steadily proceeding, Japan will see an even greater number of jobless people.

As can be seen, labor is again on the defensive and is expected to experience a rough time in the upcoming spring joint labor negotiations. All eyes are focused on how the government, labor and management will give shape to their plan to build an employment safety net this year.