Japan's labor laws: Back toward the 19th century

The New Observer, March 1999

In a March 17 editorial, The Daily Yomiuri waxed poetic about the changes in the Equal Employment Opportunity Law, which will make it more difficult for firms to discriminate against women.

Surely there is something to say in favor of the changes in the EEOL. But what the editorial failed to mention is that these amendments, which will take effect on April 1, are part of a larger program intended to revolutionize Japan's labor market, in effect sending it back toward the deregulated atmosphere of the 19th century.

For women specifically, the changes in the EEOL were accompanied by a set of revisions to the Labor Standards Law, the main law protecting the rights of workers, which will indeed put women on an equal footing with men—in terms of working late hours and unlimited overtime.

The blueprint for the changes can be found in a 1995 report compiled by Nikkeiren (the Japanese Employers' Federation), a powerful body which represents the interests of management. The report, appropriately entitled Japanese Management for a New Age, concluded that in order to thrive in the coming age of megacompetition, the Japanese labor force would have to be divided into three classes: a core of elite workers (presumably the management representatives in Nikkeiren would fit in here), a group of specialists who could be hired on a project-by-project basis, and a third, fluid group who would be easily hired and fired to fit economic circumstances. What the report was calling for, in effect, was a just-in-time system of labor.

Although Nikkeiren's plan has not come to full fruition, it is clear that things are moving in the direction they desire. According to the Management and Coordination Agency, the share of regular workers in the workforce fell from 72.4% in 1992 to 70.1% in 1997. For women the drop was even sharper—from an already low 58.3% to 53.8%.

What has happened, of course, is that the moves to prevent discrimination against women have been coupled with this plan; they are not an integral part of this grandiose vision, but rather a concession made to pacify the more progressive mainstream elements, like the Social Democratic Party and the giant labor federation Rengo, and to motivate them to accept the vision of a more deregulated Japan.

So what lies in store for workers in Japan? Though the changes in the LSL may not be drastic, they are problematic. In addition to abolishing the restrictions on late-night work by women, the maximum length of contracts will be extended from one year to five years, making it more desirable for firms to employ workers on a project basis, retaining the option of deciding whether or not to renew the contract, rather than offering lifetime employment. Though the 40-hour workweek will remain symbolically, a system of discretionary labor will make it permissible for workers to put in longer hours as long as they agree to it—ensuring that the 40-hour workweek will remain elusive for most workers. Through this, according to Sakai Kazuko, writing in AMPO, the amended LSL has essentially changed from a law to safeguard workers' rights to a law that assures management the ability to dispose of workers freely.

More dangerous than the changes to the LSL is the set of amendments to the Dispatched Labor Law, which will open up more job categories in which managements can use temporary workers. All in all, these changes will make it easier for managements to hire workers on an ad hoc basis, without the protection of labor laws and social security, and to get rid of them when the need arises.

Flexibility is the key to the whole scheme—meaning flexibility for management. According to Ukai Yoshiaki, the changes in the labor laws amount to a push by management to cut costs and increase efficiency by exposing workers to the full force of the market, and returning to a 19th century style of labor. Or in other words, putting workers into a race with each other, a race to the bottom.

Needless to say, there is resistance to the changes. Zenroren, the Japan Communist Party-affiliated union confederation, has taken a strong stand against the changes, and JCP members have consistently voted against the changes in the Diet. The smaller Zenrokyo has also opposed the changes, but Rengo (Japanese Trade Union Confederation), the largest trade union center, with nearly 8 million workers, has sent representatives to the various committees that have debated the changes, and because of its involvement in the dealing over the particular pieces of legislation, has essentially adopted a stance of constructive engagement toward Nikkeiren's ideas, not taking any strong stand against the changes to the LSL, for example.

What is clear is that if changes continue to follow this path, there will be drastic effects on Japan's labor market. The task facing trade unions will then be, how to adapt to this new reality, and how to protect workers in an environment where the laws will no longer be on their side.