The rise and fall of Japan's labor unions

By Scott Gordon, Daily Yomiuri, 5 March 2000

The birth of a country's steel industry is often regarded as its coming of age. Any country that has its own steelmaking capability is automatically included in any list of developed countries. Following this, it is generally assumed and accepted that any steel-producing country has a strong and effective union movement—after all, toiling in a heavy industry must have its rewards and benefits. If management exploits its workers, work stops until union demands are met and grievances redressed. But in Japan, as Andrew Gordon makes perfectly clear, the steel unions of today would never strike to enforce and win their demands, because management has completely co-opted and subjugated the union and the workers.

Many business leaders and unionists worldwide have asked if this is a bad thing. Well, in one way it is and in another it is not. Gordon thoroughly analyzes and explains this ambivalence, and has not let many vagaries enter his book. But some will easily dismiss his findings and conclusions because he deals exclusively with the steel industry in Japan, and in particular with Nippon Kokan (NKK). This would be a major mistake since the steel industry reflects the economy of the entire nation.

To judge the above statement, consider that for every employee of NKK there are 10 other workers in associated and support industries such as bars, grocery stores, schools and bookstores. If NKK employees have no money to spend, these businesses wither. And if the workers strike, everyone suffers.

And strike they did. In 1945, after unions were legalized and encouraged by the U.S. Occupation authorities, NKK workers demanded and won wage increases, job security, a safer workplace and health benefits, among other things.

NKK management, just like management in other companies and industries, fought this tooth and nail not only because of increased expenses but also because they viewed unionism as the vanguard of communism, as well as the precursor to democracy and accountability in the workplace. Which specter they feared most—the Red Menace or democracy—is debatable.

Ultimately, NKK management viewed the union as a threat to the status quo and its ability to control the company, especially the workers, in any way deemed necessary. Never mind that the average white-collar worker had absolutely no idea of the physical toil on the shop floor; any perceived threat was to be expunged from the company.

The average worker knew his working conditions were intolerable: From the late 1940s to mid-1950s, a steelworker died on the job every day. No benefits were given to the families and often the final pay would be delayed.

It was in this atmosphere that the unions thrived. But because of their success, the Cold War and an about-face by the U.S. Occupation authorities, management began to gain the upper hand.

Management was not only smart but brilliant. By setting up rival unions, quality circles, family organizations and various other clubs, it was able to neutralize and marginalize any success and appeal the unions possessed.

The subjugation of unions was insidious and remains so to this day, in all industries. Every union initiative was and is countered by management proposals that often have the same aim. And since management basically controls the union, dissenting opinion is nonexistent.

Dissenters themselves are often denied promotions, pay raises and other benefits with union connivance so that harmony can prevail. In one case, NKK helped a group of union dissidents set up their own company to get them out of the workplace.

Unions in Japan were the victims of the propaganda that all employees work for the improvement of the country and the company, regardless of the level of worker exploitation or unsafe working conditions. After the war, this was certainly true and unionism flourished, but as time passed, the unions were infiltrated by pro-company workers who made it seem that unionism was anti-Japan.

The unions turned from protecting the workers to protecting the company. At one time, in the all-too-recent past, this form of union-management cooperation was hailed by many to be the way things should be. However, because of the bursting of the bubble economy, this scenario is now interpreted as the cause of the downfall of Japanese industry.

Gordon disagrees. His research and informed opinion state quite clearly that behind the questions regarding the actual aims of the union, and how it faces and deals with management, there is a plethora of reasons that indicate Japanese industry will be very adaptable and competitive, not despite history but because of it. Japan Inc. is only resting, gathering strength for another change.

Gordon does not live up to the promise on the book jacket: to explain Japanese business and how it will change in the coming years. Instead he gives us the history and results of unionism at one steel mill. By doing so, he also shows how and why Japanese business is the way it is.

Nothing like NKK's tactics could be allowed in the United States, but thousands of steelworkers lost their jobs there. In Japan, they were transferred or put on leave. What is good for a Japanese company is good for the union and vice versa. The lesson is clear, but will anyone except the Japanese believe it?