- General Comments
“The Report of the Committee on Management and Labor Policy” (hereafter
the Report) announced by Japan Business Federation (NIPPON-KEIDANREN)
on December 19th, 2007 raises those problems like promotion of productivity,
strengthening of international competition and the necessity of building
up a all-the-members participating type of society, as the problems which
now confront us and should be settled as early as possible,in the economic
and social circumstantial changes such as further progress of the globalization
and a trend towards declining birthrate. JTUC-RENGO can own this way
of thinking jointly as a common recognition.
However, in the concrete policies for employment and wages, although
the Report points out the limitation of market supremacy saying that “market
mechanism is not almighty”, it still insists that “it is
necessary to promote reform of the regulations” and that “competitive
pressure in the cost has increased”. Moreover, there is no change
in their traditional way of claim that for that purpose it is necessary
to encourage the growth of companies by promoting further deregulation
and further reduction of the cost, thus conclusively, throughout the
Report, emphasizing “the restraint of the total sum of personnel
cost” of the industries and companies for “strengtheninginternational
competition”.
Although the Report argues that it is necessary to realize a
domestic demand-led economic structure which regards the companies and
the family expenditures as both wheels for a stable growth of Japan,
no reference is made either to the drop of disposable income of workers
or to aggravation of the problem of the disparities, and no posture to
face up to and overcome the serious difficulties which the Japanese economy
and society are confronted with is seen. Such an argument that the disparities
of wages would be lessened if the economic growth rate could become high
can be said nothing but a claim that does not reflect the present reality
that the family income is decreasing in spite of economic growth. Moreover,
in the present situation where there is unevenness in profit by company
size and by industry and region, the Report points out that “there
are not a few companies which feel difficulties in raising the wages” and
then says that “pay-scale increase across the market is a past
thing”. This argument is not only too scrupulous about the management
logic but also it does not show any consideration for those people in
a weak position who moan expansion of the disparities caused by excessive
extortion of income distribution. The argument will never receive any
social confidence. From the viewpoint of developing negotiations in a
concrete manner in the coming Spring Struggle, some comments on the points
which cannot be overlooked should be referred to as follows:
Firstly, a comment should be made on the point that it is essential “to
realize a fair distribution” for the present Japanese society.
The Report argues, on one hand, that “the common problem for both
the employers and the workers is improvement of the productivity of the
individual company”, but it claims, on the other hand, that “the
amount of increase in the total sum of personnel cost should be determined
right within the limit of productivity improvement, in consideration
as well of interest payment, dividends, internal reserves and so forth.” This
means that Japan Business Federation (NIPPON-KEIDANREN) denies by themselves “Productivity
Standard Principle” which they had continued to claim to enable
wage raises within the limit of productivity increase. Moreover, the
claim ignores the employees as a stakeholder. JTUC-RENGO is not arguing
that the workers’ relative share for gains and the wages should
be raised through reducing dividends and/or internal reserves. What JTUC-RENGO
is pointing out is only that it is necessary to review the distribution
which has lost its balance so as to establish a just and fair distribution.
The Report also states, on one hand, that “the amount of increase
in the total sum of personnel cost should be determined through negotiation
by individual company” but, on the other, it argues that there
are not a few companies which feel difficulties in raising wages”,
thus developing the claim for restraining wage raises as a whole. However,
in the present situation where there are many industries and companies
which have recovered and improved earnings remarkably, is it not a big
role of “NIPPON-KEIDANREN” to encourage positive measures
to rouse domestic demands from a broad viewpoint? It should be pointed
out that so far, only micro logic has stood out, and as a result of “error
of synthesis” there is a great concern that the macro-economy may
be hindered.
In addition, during the period from the late 1990s to these days,
each industry and company took various steps for change of its business
operational structure at the risk of its survival. In the meantime, it
is recognized that “the portfolio of employment” which was
made public by the former Japan Federation of Employers’ Associations
(NIKKEIREN) in May 1995 spread to each industry and company and became
a major factor to increase non-regular workers thereafter, thus leading
to the birth of present day problem of serious disparities. The Report,
however, takes no account of “disparity-widening society” or “expansion
of the working poor” and does no more than state that “the
Japanese style of employment system functions soundly as a whole” and
that “we are burdened with an unfortunate history that the refrainment
of new hiring after the collapse of the bubble economy has expanded to
the glacial epoch of employment”. Far from reflecting upon the
past management posture, the Report does not give the slightest consideration
about it. We can never accept such an attitude. It is natural to do its
duty as one responsible party for settlement of the problem of “youth
employment”. JTUC-RENGO has already started its activities to tackle
this issue by setting up “Center for Non-Regular Employment”.
JTUC-RENGO will promote its activities at a close cooperation with its
local RENGOs. Management side is also expected to take such positive
measures as to change non-regular workers to regular employment.
Lastly, we would like to touch upon the importance of “industrial
relations”.
In the Report, it is stated that “a company is a community of the
employer and the employees bound together by common fate” and that “our
activities for improvement of productivity based upon close communication
between management and employees is an asset to be proud of to the world”.
JTUC-RENGO does not dare to deny this recognition. However, we cannot
but feel that the Report develops an argument that places importance
only upon individual labor-management relation. It should bepointed out
here that, needless to say, industrial relationship is made up of three
levels, i.e. enterprise or company level, industry level and national
level, and it is built up by the way how these levels relate and connect
with each other in one way or the other. Moreover, the present industrial
relationship has been established with strenuous efforts of our predecessors
as well as with accumulation of their activities made on the basis of “three
principles of productivity”. Referring the view that a good relationship
is established only upon continuous efforts of both the management and
the workers for a just and fair distribution, our general comments on
the Report are concluded.
- Concrete Opinions
1)On the decline of labor’s relative share
In the Report, the argument to retrain wages is developed as
before, and an intention to deny such wage raises that one is on the
same level with the other, in order to try to restrain wages as a whole,
can be seen through it. In addition, the Report states that “it
is natural that labor’s relative share declines in the situation
of economic expansion”. No mind is felt to correct distorted structure
of the share. However, the present situation in which labor’s relative
share does not rise even if the period of economic recovery has passed
for five to six years is inexplicable only with the theory of business
cycles. And as was done last year, the Report asserts the argument of
its own convenience, distorting the fact by insisting that “labor’s
relative share is at a high level even if it is seen historically and
internationally” (wages have indeed declined in both nominal and
real terms and the international comparison of wages made by NIPPON-KEIDANREN
is inappropriate in its way of getting data). Where has “the three
principles of productivity” gone? How long do the companies keep
management posture to restrain wages? They should start with properly
responding to the perseverance of workers.
2)On the expansion of domestic demand
In the Report, it is stated that, viewing the present state where
the service industry and small and medium-sized enterprises both of which
are domestic demand-oriented industries are in a long slump or in the
decline, it is necessary for them “to make independent and autonomous
management efforts” so as to improve their productivity. However,
it is clear even from the result of a research conducted by JTUC-RENGO
that there are many small and medium-sized enterprises which confront
reduction of unit prices forced by their client companies or suspension
of business with them. Therefore, it is important to demand fairness
in business relations among companies and so forth. It is difficult for
small and medium-sized enterprises to improve their earnings without
establishing fair business relations. If the same stance is taken as
before without putting out any particular policy, it will be absolutely
impossible for the service industry and small and medium-sized enterprises
to recover. While the Report states that “in order to secure a
stable growth of Japan, it is needed to assume the companies and family
expenditures as both wheels”, but it lacks consciousness of the
importance to expand consumption by positively improving wages. With
this, we cannot possibly expect any economic recovery through the growth
of personal consumption or any domestic demand-led economy.
3)On equal pay for equal value work
The Report states that “it should be made clear that NIPPON-KEIDANREN
is not in a position to make an objection to the idea of equal pay for
equal value work”. If this statement is a serious one, it is heartily
welcomed. But the Report states following this statement that “equal
value work is the work which brings equal value-added to the company,
taking also into account the factor of expectation for the future”.The
argument to see the factor of expectation as value-added is an argument
which is accepted nowhere in the world. The Report itself flatters “a
wage system based upon job, role and contribution” in its section
on “Improvement for an open wage system” and states that
by arranging such a system “the opportunity when everybody can
challenge fairly is opened”. To regard one-sided expectation of
the enterprise as value is to deprive of “the opportunity to challenge
fairly” which the Report itself mentions. Still more, in the Report,
it is stated that, even if there are differences in treatment, they should
be regarded as “reasonable” if they derive from the differences
in “the degree of skill or the level of occupational ability”, “responsibility
or expected role” or “working hours or the possibility of
transfer”. If so, when there is no difference in them, equal treatment
for the work of equal working hours should be immediately realized.
Moreover, the Report states, on the argument about equal wage
by the type of job, that “if the location or the timing is different,
the demand and supply of labor are different. Therefore, to demand equal
treatment for those works of the same type of job beyond the framework
of enterprises or companies lacks reasonable grounds”. It is natural
to say so. But, if that is the case, “if the location or the timing
is the same, equal treatment for those works of the same type of job
beyond the framework of enterprises or companies” should be realized.
Still more, the Report refers to the differences of productivity among
companies. But, if there are differences in productivity, is there any
difference in purchasing price of raw materials? It is not acceptable
to bring forth the differences of productivity among companies only for
the wages and treatments which are the purchasing prices of labor force.
Then the Report claims that, as it is impossible to convert all
part-time workers to full-time long-term employment, “wage system
should be so changed as to be based upon job, role and contribution”.
This is nothing but a claim made for its own convenience to adapt “the
wall between ‘regular’ and ‘non-regular’ work” to
the course of non-regular work. As a matter of fact, this is considered
to be the claim to realize standardization of the wage level at a lower
level.
4)On minimum wage system
The Report states that “the raise of minimum wages that neglects
productivity will definitely aggravate the cost structure of small and
medium-sized enterprises” and then asserts that “the minimum
wages by industry which have become like adding unnecessary things should
be abolished”. This assertion neglects the result of the discussions
made among the representatives of public interest, the workers and the
employers, which reached to an agreement after one year discussion last
year. It also neglects the course which led to the approval of the Minimum
Wage Law (Revised) in the Diet. We cannot but say that the assertion
is completely irrational. Not advocating that the competition can be
maintained only by restraining minimum wages, should it not be sought
how to realize the profitability of the companies concerned?On the basis
of the purposes of the Revised Law, we will strive for reinforcement
of our involvements in the minimum wage agreement at companies and for
a new establishment or revision of the minimum wages by industry.
5)On the management attitude to try to make workers convenient
for its usage
i) The Report states, in its section on “Establishment of Work-Life
Balance”, that “it is important to place emphasis upon ‘result
of the work’, namely how much work the worker has done, not upon “process
of the work’ of ‘how longer the worker has been at the workplace’,” and
then asserts that “with this, the overtime work of no use can be
restrained” and that “the Work-Life Balance will be established
through the improvement of productivity”. The Report catches the
idea of Work-Life Balance only as one of the means to restrain wages.
ii) Moreover, as to “independent and autonomous way of work”,
the Report states that “it is necessary to examine the introduction
of a system which will enable independent and autonomous control of time
without being seized with existing laws on working hours or intended
jobs, …by admitting not a certain type of time control but a way
of work which enables to control time autonomously”. This is the
same way of thinking with the idea of “the White Collar Exemption.” Moreover,
the Report states that “fully basing upon the past criticism and
problem indication, it is necessary to explain it carefully to people”,
indicating that as to the White Collar Exemption it was not its contents
but a lack of explanation to people that mattered. There seems no repentance
at all.
iii) The Report develops the same claim as before that it is
necessary to promote deregulation in order to increase those workers
who are easily used, through reviewing the job seeker’s fee referred
in the Employment Security Law and through reviewing the Worker Dispatching
Law, as well as by accepting foreign workers. It is demanded that this
claim be reviewed from the view point of protection of the workers.
iv) In addition, the Report indeed touches upon the Work-Life
Balance, but it does not refer to either long working hours or extra
wages. However, correction of long working hours is an important subject,
from the point of establishing the Work-Life Balance. One of the issues
is the rate of extra wages for overtime work. The rate of extra wages
here in Japan is at the lowest level internationally. If the management
side advocates global standards, it should naturally accept the global
standard for the rate of extra wages as well. JTUC-RENGO will actively
tackle the issues of correction of long working hours, the rate of extra
wages and so forth in the coming Spring Offensive.
v) In the Report, it is stated that a constructive attempt is
being made to harmonize and balance non-regular employees with long-term
employment (regular employees)”. But, in reality, when we think
of the present situation where the job-openings-to-applicants-ratio for
regular employees is low and where the issue of the so-called “freeter” remains
unsettled, we cannot but have doubt over “a constructive attempt”.
6)On international competitiveness
The Report states that “in order for our country to realize economic
growth and affluent life, we have to maintain and strengthen our international
competitiveness” and then says that “the working conditions
including wages of our country are still at the top level in the world
and it is necessary to keep this in mind when the negotiation on wages
is conducted between the employers and the workers”.
But, the reason why distortion of the shares and hanging low
of the consumption have been caused is the wage restraint that has been
insistently continued in spite of good or bad conditions of business
results with a simple idea that the reduction of cost is equivalent to
the reinforcement of international competitiveness. It is needed to change
this attitude to try to restrain wages. Moreover, the Report states that “the
most precious asset we have is human resources”, but the fact that “human
ability on the spot” at many workplaces has deteriorated derives
from the bad effect of personnel policies which have looked down “the
investment to human resources” based upon a long-term perspective.
It is needed to positively invest in human resources and bring up “the
person” properly.
- Conclusion
It is only by establishing a society where those who work seriously
are remunerated and where employment insecurity or fear for the future
is overcome that the company can become a safety belt of the society.
The argument to restrain wages that forgets this can be judged as nothing
but an argument which causes “dangers and insecurity” to
the society. Both the employers and the workers should play their respective
positive roles for establishing socially fair shares and for making
rules. JTUC-RENGO, with a recognition that “1% or more of achievements
should be distributed to the workers in a macro point of view”,
will aim at the raise of disposable income and demand that the distribution
of achievements commensurate to economic growth be made to the workers
including non-regular workers. At the same time, in order to break
away from the gap-widening society, JTUC-RENGO will aim at the raise
of living standard of all workers including unorganized workers and
the raise of the rate of extra wages for overtime work, through strengthening
the activities of “the Part-time Workers’ Joint Struggle
Conference”, “the Joint Struggle Committee for Small and
Medium-sized Enterprises” and “the Joint Struggle Committee
for Raise of Extra Wages”.
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