Why are Japanese trade unions cooperative?

Trade unions in Japan are generally cooperative. They thoroughly discuss with top management to improve competitiveness of companies instead of contending against management. Because, if competitiveness of their company improves, employees can expect promotion of job security and wages increase. Top management thinks that some kind of profit sharing with trade union members is necessary in order to make the company more competitive.

Cooperative relationship between labor and management did not exist from the beginning of trade union movement in Japan. After the World War II, a lot of labor disputes happened everywhere. In order to democratize Japan, GHQ (General Head Quarter; the governing body to occupy Japan) introduced many policies. Among them was an establishment of trade unions. Trade union movement was illegal before the World War II, and GHQ encouraged workers to organize trade unions. Many trade unions, which were established at that time, conflicted with management in many occasions because the unions were led by aggressive leaders. Some leaders of trade unions argued that unions had to play a key role to achieve socialist revolution in Japan.

Trade union members accepted the claims of those leaders at the beginning, but increasing wages and standard of living, which high economic growth from the late 1950’s realized, changed way of thinking of union members. They came to feel antipathy toward the aggressive leaders, who called for socialist revolution. In the second half of 1960’s, change of leadership structure happened in many trade unions. Those who argued that they thoroughly discussed with management to establish cooperative relations became unions’ leaders. As a result, in the early 1970’s, many trade unions changed their activity style from aggressive to cooperative.

Trade union became a good partner for management to improve competitiveness through sincere discussion. Such kind of leadership may derive from two elements. One is that a company’s CEO is mostly promoted from ordinary employees. Except for small- and medium-sized companies and some owner companies, CEO is generally nominated by shareholders as the result of internal promotion of employees. This type of selection of CEO leads an opinion of employees that CEO is their colleague and at the same time CEO thinks that cooperation with employees is important.

Another element is that Japanese companies have adopted a membership-based employment system. Top management and employees are on the same ship so they believe that piloting the ship in cooperation is important to ride out rough waves of market competition. For the membership-based employment system, employees have loyalty to their companies and are willing self-sacrifice for their companies. Because, by so doing, the employees are respected by other members and self-sacrifice leads to the employees’ promotion.

Japanese people as well as foreign people want to get a better income to have a good standard of living. Many Japanese people, however, think the development of their company is required to increase their income. They also do not think it is the best plan that they go on strikes to plunge top management to win better working conditions. Although Japanese people and foreign people have the same goals to attain a good standard of living, ways to attain the goals are different. One could argue that this is the main characteristic of relationship between labor and management in Japanese companies.