Japanese Autoworkers Want a Slice of the Abenomics Pie

Japan’s unions, particularly the autoworkers’ unions, are going in to the annual labour talks demanding pay rises from cash-rich au...

Japan’s unions, particularly the autoworkers’ unions, are going in to the annual labour talks demanding pay rises from cash-rich automakers. As talks get underway, a very rare showdown may occur in Japan’s labour relations after years of being strike-free.

Traditionally, most unions in Japan have had a policy of maintaining good relations with their bosses and this has been very true of the autoworkers who have not been on a mass strike for some 30 years, an attitude that has created good relationships but very few pay rises.

Every New Year in Japan, the management and workers negotiate the year’s pay rises in a process known as shunto or ‘spring offensive’. The closed door, somewhat civilised (well, at least compared to other countries’ industrial relations) process rarely end with huge pay rises for the workers. In fact, this year, Toyota workers are asking for just JPY4000 (approximately USD39) average monthly increase and at Honda, just JPY3500. The union has not requested a base increase since 2010. In the past few years, the policy known globally as Abenomics, after Japan's Prime Minister, Shinzo Abe, has weakened the Yen and made Japanese exports more attractive again. As a result of the weaker Yen, all of the big Japanese carmakers are expected to report record profits and the Prime Minister himself has called for companies to pass on some of that profit in the form of pay rises and bonuses to the workers.

Yasunobu Aihara, President of the Japan Automobile Workers Union, will be asking for more than a five-month bonus this year for the workers, the first time in 15 years that this has been requested. “The Japanese economy is at a major turning point," Aihara said in a recent press conference. "To end the prolonged deflation and to ensure the nation's economy will revive and grow sustainably, all member unions decide to ask for an increase in monthly base pay."

Labour relations are a far cry from factory-shuttering labour disputes of Europe, the tens of thousands of striking South Korean railway workers, who demonstrated for weeks on the streets of Seoul in December, or their Australian counterparts who have recently been blamed for voting to keep their conditions over keeping their jobs (Read: Toyota Says Sayonara To Australia).

For many years, Japan has prided itself on its civilised labour relations, despite the economic stagnation of the past 20 years, with near frozen wages and unstable employment in a country where a job for life is considered the norm. Not everything is as it seems in supposedly prosperous Japan as some 30% of the workforce now find themselves with what is described as a non-permanent job and a poverty rate that is hovering around 16%.
“Cooperation rather than confrontation has been a long tradition in the private sector,” said Koichi Nakano of Tokyo’s Sophia University. “There was this idea that what matters is not a person’s class but rather the nation’s survival. Employers had to accommodate workers’ needs and employees sacrificed their class interest and would be patriotic workers for both the company and country. It was a powerful idea.”

It would seem that everyone in Japan is middle class and can find a job, and not obsessed about moving up the social ladder. Crime rates are low as are unemployment rates; welfare benefits are generous and workers already receive relatively high benefits and bonuses. On top of this, senior management earn a fraction of the massive salaries that their western counterparts earn and perhaps this narrower income gap has made modern Japan hardly ripe for revolution.

After the Second World War, some one million people were homeless in Tokyo alone. The communist party was a political force to be reckoned with and half of all workers were unionised and strikes were commonplace. In 1974, there were over 5000 strikes with more than 3.6 million workers taking part. Today the workforce is just 18% unionised and complacency, or is it patriotic duty, has restricted strikes to just a few dozen involving a few thousand workers.

But this year may be different with calls from the Japanese government and even the IMF for the wealth to be shared. The six million strong Japanese Trade Union Confederation calls for the first substantive pay hikes since the financial crisis and, who knows, even a bit of militancy.


For the past two decades, in fact ever since the Japanese property bubble burst in the early 1990s, the Japanese economy has been in a deflationary cycle which has made growth and prosperity difficult to create. Shinzo Abe is the Prime Minister of Japan and after his re-election to the post in December 2012 (he last held the position in 2007), he introduced a policy to revive the sluggish Japanese economy with 'three arrows'. These arrows are a massive fiscal stimulus, aggressive monetary easing from the bank of Japan and structural reforms to boost Japan’s competitiveness.

The process seems to be working. With a weaker Yen, exports have surged and the Tokyo Topix stock market index has gone up by 51%. The Japanese public seems to have regained their love of luxury goods. What remains to be seen is if the momentum can be maintained after some of the tax hikes that are due later this year. To read more, go to Abenomics.

image: Wikipedia


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