Japan's labor unions

Flath, David

The various labor laws enacted in Japan in the Occupation era, and still in effect today without substantial amendment, legitimized unions, both as bargaining units on behalf of the employees of large companies and as political organizations, but prohibited strikes by public employees, and did not lead to the establishment of valuable labor monopolies. The effective bargaining units in wage negotiations in Japan are mostly enterprise unions, whose respective members are employees of a given company. This does not preclude their having succeeded in raising members' wages. Japan's infrequency and short duration of strikes is a poor indication of the effectiveness of its labor unions at obtaining higher wages for their members. The smallness of losses due to strikes in Japan means only that there is little discrepancy between the unions' and employers' information regarding the employers' maximum willingness to pay a premium for union members' services. It does not necessarily mean that the premium itself is small. Enterprise union members in Japan mostly include the regular employees of large firms, trained in company-specific skills and expectant of long ultimate tenures of service. Compared to members of a typical industry-wide union in the U.S. or elsewhere, the members of a Japanese enterprise union are relatively homogeneous and have had a longer time in which to observe the behavior of their employer. For both these reasons, it is quite natural to suppose that union members in Japan should be relatively well-informed regarding their employers' willingness to pay a premium for their services.

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Academic Units
Center on Japanese Economy and Business
Center on Japanese Economy and Business, Graduate School of Business, Columbia University
Center on Japanese Economy and Business Working Papers, 150
Published Here
February 9, 2011