The Economic Effects of Trade Unions in Japan

215 Pages·2000·0.887 MB·English

by  Toshiaki Tachibanaki, Tomohiko Noda (auth.)

The Economic Effects of Trade Unions in Japan
Also by Toshiaki Tachibanaki
CAPITAL AND LABOUR IN JAPAN: The Functions of Two Factor Markets
(with Atsuhiro Taki)
FROM AUSTERITY TO AFFLUENCE: The Transformation of the Socio-Economic
Structure of Western Europe and Japan (co-editor with Richard T. Griffiths)
LABOUR MARKET AND ECONOMIC PERFORMANCE: Europe, Japan and the
USA (editor)
PUBLIC POLICIES AND THE JAPANESE ECONOMY: Savings, Investments,
Unemployment, Inequality
WAGE DETERMINATION AND DISTRIBUTION IN JAPAN
WAGE DIFFERENTIALS: An International Comparison (editor)
WHO RUNS JAPANESE BUSINESS?: Management and Motivation in the Firm
(editor)
Also by Tomohiko Noda
THE ECONOMICS OF THE TRADE UNION (in Japanese)
The Economic Effects of
Trade Unions in Japan
Toshiaki Tachibanaki
Professor of Economics
Kyoto University
Japan
and
Tomohiko Noda
Lecturer in Economics
Momoyama Gakuin University
Osaka
Japan
First published in Great Britain 2000 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
Acatalogue record for this book is available from the British Library.
ISBN 978-1-349-40546-6 ISBN 978-0-333-98380-5 (eBook)
DOI 10.1057/9780333983805
First published in the United States of America 2000 by
ST. MARTIN’S PRESS, LLC,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
Library of Congress Cataloging-in-Publication Data
Tachibanaki, Toshiaki, 1943–
The economic effects of trade unions in Japan / Toshiaki Tachibanaki and
Tomohiko Noda.
p. cm.
Includes bibliographical references and index.
1. Labor unions—Japan. 2. Japan—Economic conditions—1945– 3.
Industrial relations—Japan. 4. Labor policy—Japan. I. Noda, Tomohiko,
1963– II. Title.
HD6832 .T23 2000
330.952'044—dc21
00–042244
©Toshiaki Tachibanaki and Tomohiko Noda 2000
Softcover reprint of the hardcover 1st edition 2000 978-0-333-72467-5
All rights reserved. No reproduction, copy or transmission of this publication may be made
without written permission.
No paragraph of this publication may be reproduced, copied or transmitted save with written
permission or in accordance with the provisions of the Copyright, Designs and Patents Act
1988, or under the terms of any licence permitting limited copying issued by the Copyright
Licensing Agency, 90 Tottenham Court Road, London W1P0LP.
Any person who does any unauthorised act in relation to this publication may be liable to
criminal prosecution and civil claims for damages.
The authors have asserted their rights to be identified as the authors of this work in accordance
with the Copyright, Designs and Patents Act 1988.
This book is printed on paper suitable for recycling and made from fully managed and sustained
forest sources.
10 9 8 7 6 5 4 3 2 1
09 08 07 06 05 04 03 02 01 00
Contents
Preface ix
1 Introduction 1
2 Unions and Social-Economic Background 13
2.1 Introduction 13
2.2 Conditions of Union Participation Rates 13
2.2.1 Historical trend 13
2.2.2 International comparison 15
2.2.3 Implications for Japan and studies of
unions in Japan 19
2.2.4 The importance of non-unionized firms and
the role of firm size 20
2.2.5 Enterprise unionism 23
2.2.6 Several thoughts on industrial relations
in Japan 24
2.2.7 Process of joining a union 25
2.2.8 Difference by industry 28
2.2.9 Four groups of unions in Japan judging from
union participation rates 31
2.3 Heterogeneous Workers and Management of
Trade Unions 33
2.3.1 Implications of heterogeneous workers
for unions 33
2.3.2 Union fees, full-time union officials, leaders, and
union objectives 34
2.4 Attitudes of Employers (i.e., Management Side)
Towards Unions 36
3 Attitudes of Non-Union Members Towards Unions 40
3.1 Introduction 40
3.2 How Do Non-union Members Feel
about Unions? 41
3.3 Who Feels the Necessity of a Union among
Non-Union Members? 44
3.4 Expectation for the Effect of Trade Unions 47
v
vi Contentss
3.5 Reasons for the absence of a
Strong Unionization Movement 54
3.6 Concluding Remarks 61
4 Union Voice, and Its Effect on Satisfaction and Separation 63
4.1 Introduction 63
4.2 Empirical Results 65
4.3 Simple Statistical Test 68
4.4 The Union’s Effect on the Level of Workers’ Satisfaction 70
4.5 The Effect of Union Voices on Labour Turnover 74
4.6 Concluding Remarks 77
5 The Effect of Unions on Wages 79
5.1 Introduction 79
5.2 A Brief Introduction to Wage Determination
in Japan 81
5.3 Wage Differentials between Unionized Firms and
Non-unionized Firms 87
6 The Effect of Unions and Employee Voice on Wages and
Working Conditions: Their Endogeneity Problem 93
6.1 Introduction 93
6.2 Endogeneity Problem and Union Effects 94
6.2.1 Endogeneity 94
6.2.2 Other findings on the effect on wages 97
6.2.3 Statistical test 99
6.2.4 Effect on other working conditions 100
6.3 The Effect of Voices: Union Firms versus
Non-union Firms 102
6.3.1 Voices of employees 102
6.3.2 Quantification of the voices and
estimation method 103
6.3.3 Empirical results on non-wage
labour conditions 106
6.3.4 Effect on separations 110
6.3.5 Summary 112
6.4 Concluding Remarks 112
7 The Effect of Voices on Working Conditions and
Their Economic Interpretation Based on
Enterprise Unionism 114
7.1 Introduction 114
Contents vii
7.2 Enterprise Unionism and Labour Participation 115
7.3 Voices of Unions (Employees) and Management Policies 117
7.4 Data Sources and Preliminary Analysis 120
7.5 The Effect on Productivity 123
7.6 The Effect of Voices on Wage Increases and Bonuses:
The RIALS Data 129
7.7 Overall Evaluations 132
8 The Effect of Union Voices on Productivity 137
8.1 Introduction 137
8.2 Participation of Employees (Unions) in Management:
Voices and Productivity 137
8.2.1 Better communication between management and
employees 137
8.2.2 Detailed discussions on the reasons for better
performance 139
8.3 Listed Firms 142
8.3.1 Data source and estimation method 142
8.3.2 Empirical results 143
8.3.3 Economic interpretations 147
8.4 Unlisted Firms 149
8.4.1 Data source and estimation method 149
8.4.2 Empirical result 151
8.5 Concluding Remarks 156
9 The Effect of Trade Unions on Labour Shares and
Industrial Relations 158
9.1 Introduction 158
9.2 Theory of Collective Bargaining and the Effect on Labour
Shares 159
9.3 Time-series Movements in Labour Disputes and
Labour Shares 161
9.4 Functional Form and Data 164
9.5 Empirical Results 166
9.6 Discussions on the Empirical Results 170
9.7 Concluding Remarks 173
10 Concluding Remarks 174
Bibliography 179
Index 185

Preface
The Japanese economy worked very well from the immediate post-war
period to the first oil-crisis in 1973. The growth rate of the GNP was
quite high (about 7–10 per cent) during the period. After recovering
from the first oil-crisis the Japanese economy performed fairly well.
The growth rate of the GNP was stable (about 3–5 per cent), and the
rate of unemployment was considerably low, say about 1–2 per cent.
This stable and sound economy ended in the early 1990s, and the
economy has since been in a long recession.
What was the role of trade unions in these periods? Did trade unions
in Japan help the Japanese firms to have a strong competitive edge,
and thus the Japanese economy to work well? In particular, were trade
unions helpful in raising individual firms’ performances represented by
productivity and some other variables? If the answers to these ques-
tions are ‘yes’, what are the causes and reasons for ‘yes’? If ‘no’, we
have to explain the reasons for ‘no’. ‘No’ possibly signifies that trade
unions raise the wage level of the members too high, and thus lower
firms’ productivity significantly, although they are beneficial to the
members.
Since the Japanese economy and society changed drastically in the
past fifty years as described above, it is quite likely that the role of
trade unions and the economic effect of trade unions also changed
drastically. This book intends to examine these changes in trade union
movements and the effect of trade unions on various economic vari-
ables such as wages, working hours, productivity, labour shares, etc. in
these long-run periods.
Although the economics of trade unions has been one of the most
popular subjects in Europe and North America, possibly because the
unions had considerably influence on important economic variables
such as wages, productivity, profit, investment, etc., it has been a rela-
tively unpopular subject in Japan for the reasons given in this book.
This book intends to fill such a gap in Japan.
The Japanese trade union movement differs considerably from those
in Europe and North America. Consequently, it is important to identify
the institutional and functional differences. One crucial characteristic
in Japan is enterprise unionism, which is different from craft unionism
and/or industrial unionism. This book provides readers with, first,
ix