On January 12, RENGO released its views on Nikkeiren's (Japan Federation of Employers' Association) "Working Group Report for Labor Problems" criticizing Nikkeiren sharply for its decision not to raise wages for the seventh consecutive year. On January 14, RENGO held its "2nd Central Struggle Committee" to endorse the "1999 Spring Struggle Present Plan" and on the same day held the "1999 Spring Struggle/Representatives Pep Rally" at the Japan Telecommunication Workers' Building in Tokyo. In a speech displaying general resolve for the coming struggle, RENGO President Washio said, "we want to maintain this very excellent system of the Spring Struggle. We cannot proceed with economic recovery with Nikkeiren's no-hike. Our approach to the matter is to shore up our defenses while taking things one at a time.

"Get both jobs and pay raises," President Washio, January 14.

RENGO Views on Nikkeiren's "Working Group Report on Labor Problems"

1. Although the report suggests that the Japanese economy must come out of the current crisis as soon as possible, it fails in critical factor analysis. Measures are indecisive for the responsibility and assignments of expanding domestic demands and resolving future insecurity of management executives.
   The biggest point in this year's report is that it starts with a current awareness of the problems with the appellation to "extricate [ourselves] from the crisis." This is completely reversed from last year's statement to "carry out structure reform" from the start. More specifically, it points out that the Japanese economy is "on the precipice of a deflation-spiral," and the world economy is "fearing simultaneous depression on a world-scale" making the prime task at hand to "put the economy back on the recovery track as soon as possible." To that end, it proposes to create emergency plans to recover credibility of the finance system and expand domestic demand prioritizing economic recovery over finance reform. This indicates that even Nikkeiren could not help revising its last report's stance that stated it "could not avert transitory economic decline for structure reform."
   However the current analysis of the report ended by enumerating superficial phenomena, and factor analysis of the crisis completely dismissed the following: management responsibility which generated the bubble economy and bad debts and government responsibility for causing recession since 1997. Therefore, the report only offers obscure management responsibility for recovery, and takes the position of a bystander by raising serious questions regarding expanding domestic demand and resolving anxiety over the future.
   
   
2. It is contradictory to deny pay raises while claiming an "increase in disposable income." Refusal to raise pay levels based on a productivity principle that has broken down means nothing more than the abandonment of management's social responsibility to the national economy.
   What is beyond comprehension is how Nikkeiren can set up the "arousing of domestic demand" and "increase of disposable income" as matters of concern on the one hand, while completely refusing to raise pay, the prerequisite for them, on the other.
   The report's wording denied the claim that "consumption rise by pay hike" by stating that "consumption would grow only when there was no job market insecurity and prices were stable." Although this new report does not say so, it now claims that "under the circumstances where a pay hike is difficult, it is necessary to increase disposable income by easing each workers' tax/social security burden." From this, it can only be concluded that management has completely abandoned its social responsibility for economic recovery.
   This year's "report" still adheres to "the productivity principle" in macro-economy and solvency in micro-economy." In that the "productivity principle" was originally taken up as a preventive measure against inflation in a macro-economy; it is unreasonable to stick to this "principle" now when the Japanese economy is "on the edge of a deflationary spiral."
   However, any indications that "companies solvent enough to raise wages" in last year's report had completely vanished by this year's report. "This year especially, there were many companies incapable of raising wages. Conventional methods regarding pay increases will not change the present conditions." "The stabilization of employment must be prioritized within the total amount of expendable personnel costs, while other working conditions should be handled flexibly by management and labor." These statements in no way transcend "conventional" boundaries regarding discussions of wage repression, but rather put a damper on gradually recovering increases in consumption, throwing the Japanese economy into a "deflation-spiral."
   
   
3. Although these are positive proposals for employment stability, the report still basically stresses the loosening of the labor market and strengthening of managing individual employment. The most important aspect, the nurturing of personnel, is left to the individual, which results in a sense of uneasiness regarding employment.
   Another feature of this year's "report" is the issue of "what to do to stabilize employment." This is based on Nikkeiren's "Bluebird Plan," however while there is nothing new in it, some positive issues are presented such as the "Million Job Creation" and "NPO Actions Reinforcement." We will continue to follow any specific developments with the considerable interest.
   What one cannot ignore, however, is the in-depth proposal on "reorganizing personnel management" which was based on Nikkeiren's November 1998 report entitled "Standard Concepts of Human Affairs and Personnel Management Responding Mobilization of Employment." Specifically, it included the following.
   (1) The training and securing of personnel through proper evaluation of each individuals' abilities and contributions, and a flexible system to deal with them.
   (2) The improvement of workers "employability" through self-effort on the part of employees and corporate support. The proposal states that it is "based on Japanese businesses personnel/labor management's strong point of continuous long-term employment." But in reality it is nothing more than the "strengthening of the labor management of individuals" and a path to "individual independence, self responsibility, and individual choice (from securing employment to the development of a career)."
   
   Among the changes was last year's main issue of "nurturing company personnel" being altered to "improvement of employability". What this means is that "nurturing," a vital factor for the continued existence of companies themselves, is given the glorified name of "independence" shifting all "self responsibility" onto the workers. This fact, in addition to the "loosening of the labor market," can be said to be a declaration of the abandonment of their own efforts to "nurture" employees based on the assumption that necessary talent can be "secured" in the labor market.
   Inevitably, the "improvement of employability" proposal will be received as "your employment is no longer guaranteed, so work to improve your ability on your own." This will only create uneasiness over employment and in no way lead to employment stability.
   
   
4. This report's discussion of the "Mobilization of the Labor Market" jumps to personnel cost countermeasures too hastily leaving working rule premises such as wages and socialization of treatment completely lacking. Even more problematic is that the "Mobilization of the Labor Market" is presented as an unconditionally given factor, not to mention working rules which should be the main premise. For example, "Specific Images of Future Personnel/Labor Management (treatment aspects)" the abstract of the said report suggests "a system to standardize and make interchangeable job skills both in and out of the company (an official approval system such as the business career system)." But the crucial wage system is buried in microeconomic talk such as "the establishment of a system linked to company or individual achievement (the introduction of result-based concepts/achievement-based concepts and management methods for the total amount of personnel costs).
   In other words, if the "Mobilization of Labor" is to be promoted, then what is needed is a social, horizontal system of standards that transcend the bounds of enterprise for wages and the treatment of workers. Nikkeiren fails to address this point decisively.
   Granting that there is the relation between the amount of contributions and wages "are treated based on a case by case basis on a long-term balance" social standards such as individual wages equaling jobs wages must be created. But Nikkeiren forgets even the fundamentals of wage negotiations in its haste to create "countermeasures for personnel costs" and "countermeasures for pliability."
   
   
5. If one stands on management principles of "human respect," then one should propose a concrete plan leading to employment stability and an increase in disposable income. The "report" sonorously concludes on "how labor-management could overcome this crisis. It is at times such as this that the true worth of the conciliatory relationships based on respect and mutual dependency that have been fostered between Labor-Management thus far can be known. Mutual trust between Labor-Management is the door to future prospect."
   What management executives need now is to confirm the principle of management again, what is mentioned here as "human respect."
   That ought to begin from an awareness that for companies, personnel is nothing other than the most important "product factor" and an "investment" target for "enforcing the company constitution." Not the assumption that "if each company's productivity improvements were invested in strengthening the capital asset ratio and competitive power to enforce that company's constitution, it would eventually lead to stabilized employment and maintain working conditions."
   Unfortunately, however, it is that very Nikkeiren supporting "the country with dynamic virtue" that made the "report" following only microeconomic theories at a crucial point. Nikkeiren should be boldly raising issues from a macroeconomic point of view rising above that of individual companies. If Nikkeiren wants "management to expunge the idea of an all-powerful-market and strive to create a 'trinity' of 'market,' 'moralism,' and 'order,' then it must face this crisis with clear and concrete measures that result in employment stabilization and increased dispensable income, and will actually dispel anxiety over employment and the future.
   Nikkeiren must remember that bringing up vague abstract "future images" alone does not form a "stable Labor /Management belt."