Japanese unions gearing for rare showdown over pay rises

Toyota a target as usually compliant workers struggle over whether to take off their gloves

PUBLISHED : Monday, 17 February, 2014, 5:02am
UPDATED : Monday, 17 February, 2014, 5:58am

Japan's unions have started demanding wage rises from cash-rich firms as annual pay talks get under way, setting up a rare showdown after years of drama-free labour relations.

Unionists are questioning if usually quiescent workers should stick by a decades-long strategy of keeping the peace with their bosses and rarely going on strike, a strategy that has generated few pay rises.

Japan's auto sector is a key target, with all eyes on Toyota, the world's biggest automaker, which has posted huge profits on the back of sharply weaker yen since Prime Minister Shinzo Abe swept to power in late 2012.

Abe's economic growth blitz, dubbed Abenomics, helped fatten Japan Inc.'s bottom line, and he has called for companies to pass on some of that profit to help consumers as they brace for an April sales tax rise.

More cash in workers' pockets would assist a fragile recovery, say observers, but many - including the International Monetary Fund - say there needs to be other, deeper reforms, including greater flexibility to cut staff.

Japan's annual labour talks are known as Shunto, or the "spring offensive", but usually low-key, closed-door negotiations could easily end with few firms heeding Abe's pay rise call, perhaps counting on workers' reluctance to strike.

It is a far cry from factory-shuttering labour disputes of Europe or the thousands of South Korean railway workers who demonstrated for weeks on the streets of Seoul in December.

For decades, Japan has prided itself as a nation of labour peace, despite its 20-year economic decline, near-frozen wages and unstable employment.

"Let's see, did I go on strike once? Let me think," said Hajime, a 58-year-old media sector worker. "Oh yes! It was something like 30 years ago, it was the first and the last time. For people between 20 and 30, strikes and demonstrations are history."

That rings true with Anan, a university student who can't fathom the idea of a strike.

"Everybody is middle class, everybody can find a job, and not everybody is obsessed with moving up the social ladder, so there's no reason to be upset," he said.

With a low crime and unemployment rate, generous welfare benefits, relatively high wages and much narrower income inequality than many other developed nations, Japan has rarely been a place ripe for revolution.

But more than one-third of workers have non-permanent jobs with lower pay and fewer benefits than previous generations, while the poverty rate hovers around 16 per cent, despite Japan's rich-nation image.

A general avoidance of conflict was another factor that rippled through the friendly boss-employee relations, said political scientist Koichi Nakano.

"Instead of saying that society is wrong, people blame themselves - I didn't go to a good school, I made my boss angry, I'm not smart," Nakano said.

But this year may be different, as the six-million strong Japanese Trade Union Confederation calls for the first substantive pay rises since the financial crisis.

A recent Kyodo news agency survey found just 17 per cent of firms plan to boost pay this year.

That has Yoji Tatsui, deputy head of the union's research arm, eyeing the confrontational "outsider strategy" in neighbouring South Korea, where strikes are commonplace.

"Japan has too much of an 'insider strategy'," Tatsui said. "Maybe it's time to change that."