Rengo facing crisis over ‘shunto’

The Japan Times, 27 January 2004

If we are going to conduct labor campaigns seriously, Rengo Chairman Kiyoshi Sasamori told a New Year's get-together in Tokyo on Jan. 5, we will have to prepare for arrests. Rengo is the nation's largest labor organization.

After being re-elected chairman in October, Sasamori declared he would do his utmost to reconstruct Rengo. The ratio of union members to the total number of workers has dipped to 19.6 percent, the worst in the postwar era.

A report by the Japan Business Federation (Nippon Keidanren), Japan's largest business group, clearly states for the first time that a system to ensure wage decreases should be introduced and there should be cuts in basic wages this spring. Sasamori said the report goes too far.

The report, which incorporates the management's basic policy toward shunto spring pay talks, also says the campaigns have come to an end.

Asked at a news conference Jan. 13 about the federation's policy toward the shunto campaigns, Nippon Keidanren Chairman Hiroshi Okuda said: Are you still using that (term)? I think shunto has become a dead word.

Enterprises under severe conditions may have to lower wages and share work among employees, he said, adding that wage cuts are likely.

Even Toyota Motor Corp., whose business performance is in top shape, offered no wage increases in 2002 and 2003. Toyota Vice President Takashi Araki has indicated that there will be no wage increases this spring, saying, I don't think there has been any major change.

Signs of recovery have emerged at major enterprises, and electrical machinery and steel companies are expected to do better than last year.

But their labor federations have decided to refrain from asking for basic wage increases this spring due to severe wage polarization among enterprises within the same industry.

With prospects of no basic wage increases for employees of major firms, a sense of crisis is fast spreading to unions at smaller enterprises.

There is a monthly wage gap of about 45,000 yen between 35-year-old workers at major and smaller companies, and the gap is expanding, said Yukio Koide, chairman of the Japanese Association of Metal, Machinery and Manufacturing Workers, which consists of unions of small and midsize metal manufacturers.

No basic wage increase will have a negative effect on smaller companies, Koide said.

Executives of unions at smaller enterprises visited Rengo officials last summer and said they will conduct their own campaigns to raise wages if Rengo doe not help.

As a result, Rengo has decided to ask management to raise the hourly wage for part-timers by 10 yen and the monthly wage for workers at small companies by 5,200 yen—the first such demand Rengo has made for such workers.

But labor sources said there could be a gulf between unions at big and small firms.

An executive of a union at a major enterprise said, There is not much dissatisfaction among our members because even if basic wages are not raised, there will be a monthly raise of several thousand yen as an annual pay raise.

On the other hand, unions at smaller companies will be forced to conduct their own independent wage increase campaigns in the future, the sources said.