2003. 27

Industrial Relations in a Changing Economy:
Japan's Experience

Koji Okubayashi

November 9, 2003

Industrial Relations in a Changing Economy:
Japan’s Experience

Koji Okubayashi
Professor
Graduate School of Business Administration
Kobe University
Rokkidai2-1, Nada, Kobe, 657-8501
Japan
E-mail:okusankj@rose.rokkodai.kobe-u.ac.jp

Paper presented at the Symposium on Industrial Relations for Higher Productivity and
Employment Generation,
By Asian Productivity Organization and National Productivity and Development Centerof Sri Lanka
In Colombo, on November 10-14,2003

1

Industrial Relations in a Changing Economy;
Japan’s Experience
Contents
1.Development of Knowledge Economy
1.1.Basic characteristics of knowledge economy
1.2. Effects of knowledge economy on a national economy
2. Government Policy to Prepare for Knowledge Economy
2.1.Promotion of IT investment in 1990s
2.2 Basic law of intellectual property
3. Structural Change of Economy
3.1. Change of industrial structure
3.2. International division of labor in manufacturing process
4. Transformation of Company Organization
4.1. Restructuring of company organization
4.2. Flat management organization
5. Change of Labor Market
5.1. Increased demand for knowledge workers
5.2. Increase of software workers
5.3. Demand for temporary workers
5.4. Increase of tele-workers
6. New trends of Industrial Relations
6.1. Slow-down of union density
6.2. Diminishing number of labor disputes
6.3. Growing roles of labor –management consultation system
7. Industrial Relations Issues under Knowledge Economy
7.1.Recent Issues in industrial relations
7.2.New concept of employability27.3. Transformation of wage system
8. Recommendations to IR Issues
8.1.Promation of IT education
8.2. Recurrent education of knowledge workers
8.3. Utilization of labor-management consultation for sharing information
8.4. Labor mobility without unemployment
8.5.Legal protection of intellectual property

3

Industrial Relations in a Changing Economy
Japan’s Experience
Koji Okubayashi

1. Development of Knowledge Economy
1.1 Basic Characteristic of Knowledge Economy
1) General concept of knowledge economy
The United States economy in 1990 ‘s was sometimes called “new economy” orknowledge economy”, which differs from traditional and industrial economy. Then what
are the elements of knowledge economy? What characterizes the new economy?
The new economy that is different from industrial society is usually called“post-industrial society”. Post-industrial society is often characterized as following:(1) Service industries develop rapidly in contrast to the mature stage ofmanufacturing industries.
(2) Knowledge becomes a driving force of economic development and higher
productivity.
(3) The needs for managers and professional workers increase rapidly.
The knowledge society will come in the next stage of post-industrial society. In that
economy, the knowledge in production and many aspects of economic activities plays avery important role and become a main source of added value of products or service.
A new type of company called “knowledge-based company “ will contribute to thedevelopment of national economy. The knowledge-based company such as consulting
company cultivates a new field of economic activities in contrast to labor-intensive orcapital intensive companies.
In the knowledge economy, some new social phenomena come out such as the spreadof information technology, increase of service sector, emergence of solution business,increase of knowledge workers, and establishment of intellectual property right. These
new elements of society characterize the emergence of knowledge economy.
2) Importance of intangible assets
Lands, machines, materials, facilities, and workers are elementary factors of
production and business activities and played very important roles to increase
productivity and make a profit in the industrial society. These elements of production
are all tangible assets, which can be identified by touching them by hands. However,4

nowadays the intangible assets such as know-how of production and business, patents,
brands, design, music, game-soft, films, pictures, broadcasting, copy rights, andintellectual property become an important source of competitiveness of a company andadded value of any products and service. These intangible assets themselves have now
tremendous value and become target of exchange as a new commodity, although newlaws to identify and protect their value are not yet established well. The knowledge
economy is based on the value of these intangible assets.
2) Information technology as the precondition of intangible assets
The information technology is a tool to transfer, process, storage information that is
also intangible assets. Knowledge is a result of processing and transforming theinformation in the human brains. Information technology promotes the quick process
and mass storage of the information with little cost.
With the information technology, the intangible assets can improve their value, as is
the case that a famous brand can increase its value by mass advertisement throughwebsites. The hardware of information technology provides a business chance to build
a new system and can increase productivity of production or service. Therefore
stimulating the development as well as spread of information technology results in thedevelopment of a national economy. The level of IT of a country shows the possibility ofher economic prosperity. The spread of information technology is also very importantelements of knowledge economy.
1.2 Effects of knowledge economy on a national economy
1) New economy in 1990s
Typical effects of knowledge economy are easily identified in the rapid recovery ofAmerican economy in 1990s after the long depression in 1980s. As is shown in Figure 1,
the per capita national income of United States goes up steadily in 1990s and comeahead Japan in the later half of 1990s.They say that the development of IT industry
lead the whole American economy upwards and that it opened a new stage of economic
development at the time of stagnation of Japanese economy in “the lost decade” of
1990s.
Figure 1,here
On the contrary, Japanese economy could not catch up the rapid spread of IT in US due
to the financial problems. The per capita national income of Japan went down in the5later half of 1990s. Therefore Japanese government made a lot of investment into IT
industry and software industry to cope with American economy.
2) Globalization of economic activities
Another effect of IT revolution is the increase of direct investment of Japanesecompanies abroad. Due to the spread of IT, Japanese companies extend easily theirbusiness to other countries and intensified their business activities in the world market.
Figure 2 indicates the trends of direct investment of Japanese companies inmanufacturing industries. In 1998, the manufacturing companies producing and selling
their products abroad sell 34.6% of their products in foreign market. It means around
one third of their products are sold not in domestic but foreign market. In other wards,
their business activities are influenced not only by domestic condition but also by world
market.
This new direction of economic activities came along the development of IT in 1990s.
This globalization of economic activities of Japanese companies is a new dimension ofknowledge economy caused by the development of IT.
Figure 2, here

2. Government Policy to Prepare for Knowledge Economy
2.1. Promotion of IT investment in 1990s
Japanese government had to stimulate IT investment to catch up the “new economy”
in United States. Figure 3 shows Japanese trends of IT investment since 1990. It clearly
identified the rapid increase of IT investment since 1993. The ratio of IT investment to
GDP in 1995 reached 12.5 percent and shared 8.7 % of facility investment in private
sector.
Figure 3,here
Government also proposed “e-Japan Plan” to promote utilization of IT. Government
provided, for example, much amount of subsidy to elementary as well as secondary
school to introduce IT for education. The IT improved drastically the productivity ofbusiness, especially efficiency of office work and communication. It also opened a new
field of business in website. The market of B2B is estimated to increase drastically andto lead the development of Japanese economy. IT also facilitates global activities of6

Japanese companies.
2.2. Basic Law of Intellectual Property
For the purpose of protecting the value of intangible assets, Japanese government
enacted the “Basic Law of Intellectual Property” in July 2002. It intends to activate
economy and society by transforming traditional products and service into high added
value. The government sets a target to be a productive country based on intellectual
property.
The law declared new strategies to utilize intellectual property such as creation,
protection, utilization of intellectual property, and development of human resource toprotect these rights. It also established “Strategic Headquarter of Intellectual Property”
to provide much information on intellectual property in information-affluent society, tomodify patent law, commercial code and copy right. The Government faces the problems
of protecting the intangible assets in the world market.

3. Structural Change of Economy
3.1. Change of industrial structure
Under the knowledge economy, the weight of traditional industries among a national
economy also changes. The Table 1 indicates trends of employees engaged in eachindustry after 1950. In the 1960 during the period of rapid economic growth, employees
in manufacturing increased drastically in contrast to the drastic decrease of number of
employees in agriculture and forestry.
In 1990s, the number of employees in manufacturing slightly decreased from
11,350,000 persons in 1990 to 12,050,000 persons in 2000. On the contrary, the numberof employees in service industry increased 11,420,000 persons in 1990 to 14,780,00
persons in 2000. Many of knowledge workers supporting knowledge economy are
engaged in the service industry. This change of industrial structure counted by numberof employees engaged in service industry reflects the transformation of economy into
new one.
3.2. International division of labor in manufacturing process
It is already mentioned that Japanese companies built many factories abroad in
1990s. At that moment, manufacturing process of products is transferred to othercountries but another activities like research and development, designing, planningbusiness model, controlling the whole process of business activities cannot be moved to7the other countries. Due to the development of IT, core activities of business are inclined
to be concentrated in Japanese headquarter. The departments of Japanese companies
dealing with intangible assets remained in Japanese parts of business activities. Thisdivision of labor in business activities of Japanese companies promoted the increase ofknowledge workers within Japan.

4. Transformation of Company Organization
4.1. Restructuring of company organization
Due to the fundamental changes of economic structure and business environment,
Japanese leading companies tried to reform their organization and business domain.
For example, as is shown in Figure 4, Sony integrated and concentrated her business
into four main fields under the central headquarter. She also divided the process ofdesigning and R&D from manufacturing. Some parts of manufacturing were carried out
by Solectron, so-called EMS (Electronics Manufacturing Service), which specialized into
manufacturing of electronics products of many companies. The four “companies”
concentrated on the designing, research and development, advertisement andsupervision of Sony brand. Japanese headquarter engaged in the protection anddevelopment of their intangible assets of the Sony group. This type of division of labor
would be requested by the competition in global market under knowledge economy.
Figure 5, here

4.2. Flat management organization
Many Japanese manufacturing companies including Sony transformed theirorganizational structure under the influence of new technology like microelectronics,
information and communication technology since 1980s. Figure 5 shows the distributionof four types of organization in Japanese manufacturing industry in 1992.
It identifies that “Loosely-structured Organization” with organic work organizationand flat management organization shares around 25.7% of the 142 companies
researched. The Loosely-structured Organization is a new type of organization, whichcorresponds to multi-product small-volume production system. On the other hand,the ”Tightly-structured Organization” fit to the single-product mass production system,
which was popularly applied in 1960s and 1970s. Therefore trends of organizationalchange move from Tightly structured to Loosely-structured Organization to adapt to8

turbulent management environment in the world market, which were confirmed bylong-term field research.
Due to the transformation of organization, many practices of human resource
management also had to be changed. Traditional seniority wage system, for example, ismoving to performance-based annual salary of managers. Many employees cannot trust
the life –time employment until the retirement age of 60 years old in the same company.
Some employees prefer a new payment system, which includes retirement allowance inthe monthly salary. Therefore organizational change of Japanese companies leads tofundamental transformation of traditional human resource management.
Figure 5, here

5. Change of Labor Market
5.1. Increased demand for knowledge workers
Figure 6 indicates the trends of the absolute number of employees in each occupationalgroup since 1970. It clearly identified the rapid increase of professional and technicalworkers, clerical and related workers in 1980s and 1990s. On the other hand, absolute
number of craftsmen, manufacturing and construction workers did not increase somuch in 1980s and even went down slightly in 1990s. The rapid increase of
professionals and technician indicates the demand of many types of knowledge workers
such as scientists, engineers, lawyers, marketing specialists, consultants, systemengineers, software engineers, patent attorneys, film producers, medical workers,
musicians, brand managers, and so on. According to structural transformation of
economy into knowledge economy, weight of each occupation is also transformed.
Table 6, here

5.2. Increase of software workers
Figure 7 concentrates on the trends of employees related with information technology.
It identifies rapid increase of system engineers and programmers in 1990,1991, but
number of programmers decreased after 1992. On the contrary, number of systemengineers did not decreased so much in 1993 and 1994, and increased again after 1997.
Due to the demand of solution business, not the programmers but system engineers are
asked to work more.

9Figure7, here

5.3.Demand of temporary workers
At the same time with the increased demand of professional and technical workers,
companies requested more hiring of temporary workers to adapt to the flexible demandsof work. Figure 8 shows trends of the number of actually worked as well as registered
workers from 1990 to 1997. In the first half of 1990s under the severe economic
depression caused by financial difficulty, the number of registered workers at generallease companies increased very much but number of actually worked registrants did notincrease in proportion to registered workers. However, number of temporary workers,
registered or actually-worked, will grow in proportion to the increase of the number oflease companies due to flexible demand of work and low cost of labor with the use of
temporary workers.
Figure 8, here.

5.4. Increase of tele-workers
Tele-work is a new type of work in the knowledge economy due to the spread of
information and communication technology. Tele-workers do not have to go to theiroffice at the company but stay at home or satellite office near their residence using IT.
There are many types of tele-work, but the number of tele-workers who works morethan 8 hours per week reached 4,080,000 persons in 2002. Its ratio among employees is
5.7 % and the ratio among self-employee is 8.2 % in 2002. The tele-workers who works
less than 8 hours per week share 4,43,000 persons among employees and 1,910,000
persons among self-employees, the ratio 8.0 % and 16.0% respectively. This means thenumbers and ratio of tele-workers will increase due to the development of ICT andchange the life-style of the workers of new generation.

6. New Trends of Industrial Relations
6.1. Slow-down of union density
Figure 9 shows estimated ratio of unionization from 1950 to 2001. Just after theSecond World War when industrial relations laws were enacted under the new social

10regime, the unionization rate was the highest around 50% of all of the workers. But it
declined after 1980 because unions were mainly organized in public sectors and large
companies of manufacturing industries. Due to the increase of non-regular workers andemployees in service sector, unionization rate did not grow in proportions to the increaseof employees as a whole in Japan. This low rate of unionization in 1990s limited
aggressive attacks of trade unions against employers.
Figure 9 here

6.2. Diminishing number of labor disputes
Corresponding to the decreasing rate of unionization, the number of labor disputes
likes strikes and lockouts diminished drastically in 1990s. Table 2 identified the verysmall number of labor disputes in Western countries including Japan. Indonesia andThailand may have another political reasons for large number of labor disputes. The
knowledge workers usually do not like to rely on unions to realize their demands, but
resolve their problems by themselves.
Table 2,here

6.3. Growing role of labor –management consultation system
Low rate of unionization in Japan does not means that many employees do not haveany methods to exchange opinions with management concerning wages, hours andother working conditions. Many Japanese companies with or without unions arrange
so-called labor-management consultation system. Under this consultation system,
representatives of employees who may or may not be a union member can discuss many
aspects of working condition such as wage level, bonus, wage increase, working hours,
leaves with payment, training and management policies concerning production andsales, which may influence working life of the employees. The main deference between
collective bargain and labor-management consultation consists in the fact that labor–management consultation do not presume strikes to reach agreement between
employees and management.
Figure 10 shows the agendas of labor –management consultation system in the last
three years ending in 1997. These agendas such as wages, working hours, andemployment and personnel affairs, which are to be interest-conflicting matters between

11employees and management, are often dealt with collective bargaining. On the other
hand, these agendas such as working environment, welfare, and health caremanagement, which may be common interests for both employees and management areusually dealt with labor-management consulting system. Labor- management
consultation can provide information even on important management policy. Based on
the realistic information gained through labor –management consultation, both
employees and management exchange the opinions and express their realistic demands
without bargaining. The labor-management consultation system contributes toJapanese peaceful Industrial relations after 1980.
Figure 10,here

7. Industrial Relations Issues under Knowledge Economy
7.1. Recent issues in industrial relations
Figure 11 indicates the issues predicted in the near future of Japanese industrial
relations by companies researched by Rengo Institution in 2002. Reforms of retirement
allowance and company pension, reforms of wages and evaluation system, bonus andallowance, reform of wages, job security, and job security up 65 years old are the main
issues, which both employees and management face to solve. These issues concerns
mainly wage system and employment system that are changing from traditional
seniority wage system and lifetime employment.
Figure 11, here

7.3.New concept of employability
Under the severe depression in 1990s,even large companies, which could follow thetraditional policy of lifetime employment, had to declare that they couldn’t guarantee
job security until retirement age of 65 years old. They sometimes asked their employees
to choose earlier retirement with additional payment. The aged workers usually accept
that offer to keep their retirement allowance. Therefore the job security for aged
workers and maintenance of company pension are the important issues for employees atthe bargaining table.
Nikkeiren, the leading Japanese employers association, proposed new concept of

12

employment system for traditional lifetime employment. Figure 12 shows the new ideaof employment system based on employability of workers. The new idea emphasizes
that employees themselves have to improve their occupational skill and knowledge
instead of relying on their company’s education and training that are usually provided
without any payment by employees themselves. The lifetime employment presumes
that the company provides any professional training without additional cost for
employees. But under the new concept of employability, employees themselves have tochoose their training course and sometimes have to pay some parts of the training cost.
Employees with high occupational skill can easily change their company. However,workers with high employability may stay at their company so long as they can improvetheir skill at their original company. Therefore the concept of employability dose notalways result in frequent change of company or job for Japanese workers.
Figure 12, here

7.3. Transformation of wage system
Based on the concept of seniority wage system,
as workers are supposed to increase

remunerationof managers as wellaccording to the climbing up of the qualification

ladder that is shown at the former qualification ladder of the Figure 13 at a large
electronics company. At that system, managers who got high qualification of shuji forexample would not get lower wage than that of Shukan, even if his or her performancein a certain term was not so good. Therefore corresponding to the increase of themember of shiji or shukan of the company, the labor cost of that company swell up
consistently.
Figure 13 here

At the new system of the Figure 13, managers’ job are banded not hierarchal but
horizontally. It means that the job and performance of each manager of that company
are evaluated every year according the content of their job in a certain term. Therefore
his or her annual salary will change according to his or her job and performance of acertain term. The labor cost of that company becomes quite flexible in proportion to thereal content of job that the each manager carries out at a certain term. The labor cost of
the managers will be controlled by the real activities of each manager. This is the new13

principle of remuneration against seniority wage system, which is often called“performance-based remuneration”.

8. Recommendations to I R Issues
8.1. Promotion of IT education
Under the rapid development of IT, many young people are quite eager to use those
new machines and facilities. Employees are also requested to manipulate new tool of IT
to carry out efficiently their own jobs. However some people who are aged and notaccustomed to use new tools of IT cannot catch up the rapid change of life style and haveto limit their activities to traditional and narrow area of life. This shadow side of IT
development is often called to be “digital divide” which means division people between
one who can utilize IT and one who cannot

use IT at all. The digital divide brings an

obstacle to further development of IT society in 21 century. Therefore the IT educationand training for every people including children and aged people are urgent necessity
for a nation at the entrance of knowledge society.
8.2. Recurrent education of knowledge workers
Professional skills and knowledge in knowledge society will develop quite rapidly.
These new skills and knowledge have to be educated recurrently at higher education
system such as graduate schools and evening course of universities. Japanese
universities introduced much professional graduate school such as law school, businessschool, accounting school from 2002. Knowledge workers need quite high level ofprofessional knowledge and have to catch up to the front of its development. Therefore a
new social system of professional education for professional practitioners is required toa society at the knowledge economy.
8.3.Utilization of labor-management consultation for sharing information
There raise so many issues and problems of industrial relations in the process of rapidtransformation into knowledge economy. To solve these problems, both employees andmanagement have to discuss their problems on the base of exact and objective
information. The labor-management consultation system provides an efficientmechanism for both employees and management to understand objective situation ofeach side. Collective bargaining and strikes are not the only and best practice to reachmutualunderstanding

and agreement

14

between employees

and management.

Labor-management consultation is quite effective in reaching mutual understanding in
the Japanese experiences of industrial relations.

8.4. Labor mobility without unemployment
In the process of transformation from industrial to knowledge economy, workers haveto move from manufacturing to service industry due to the structural change of anational economy. At the same time, companies have to increase or decrease the numberof their employees according to the flexible demands of their products and changes of
their service. Therefore unemployment of many workers is necessary evil of free labormarket. However the matter is not the prevention of the reasonable unemployment but
the avoidance of long unemployment of the workers under the transformation process.
Labor mobility without unemployment is a new principle of Japanese government toadapt to the flexible labor market under knowledge economy.
8.5. Legal protection of intellectual property
Intangible assets such as patents, grand, and copyright have a large economic value
under knowledge economy. However, these intangible assets were treated to have only asmall amount of value under industrial society due to the high evaluation of material
goods. Many businesspersons still stick on the traditional value of the material goods.
Many imitations of famous brand goods are sold under the cheaper price.

Patents

invented by employees are sometimes rewarded to the inventors by a small amount of
remuneration. This under-evaluation of patents or unlawful imitation of famous bands
is to be rigidly regulated by law to protect economic value of intangible assets underknowledge economy. We are still early stage of that development, but need tointernational corporations among governments to establish the value of these
intangible assets in order to move into high stage of knowledge economy.
The end15

Figure1 Trands of Per Capita National Income(1000 US $)

35
30
25
United States

20

Japan

15

UnitedKingdom
Germany

10

Korea

5
0
1985

1990

1995

1996

1997

1998

1999

Figure2 Trends of overseas production ratio in Japan
40
35

34.6
31.2

30

27.8
24.5
22.0

20

companies producing
abroad18.3
17.8 17.0
16.7 17.3

15
11.5 10.9

10

12.7

11.6 12.4

8.7

5

3.0

3.2

4.0

4.9

5.7

6.4

6.0

6.2

7.4

8.6

9.0

5

6

7

8

9

0

1

2

3

4

5

6

7

8

198

198

198

198

199

199

199

199

199

199

199

199

199

0
198

(%)

25

manufacturing industry as
a whole13.8

Figure 3 Trends of IT Investment Since 199014(%) or (trillion)

12

Ratio of IT
investment to GDP

10Real civil investment
into IT

8
6

Ratio of IT
investment to private
sector facility
investment

4201990 1991 1992 1993 1994 1995 1996 1997 1998

Ｔａｂｌｅ１

Ｎｕｍｂｅｒ ｏｆ Ｅｍｐｌｏｙｅｅｓ ｂｙ Ｉｎｄｕｓｔｒｙ（１００００ persons)

1950

1960

1970

1980

1990

1996

1997

1998

1999

2000

2001

Male

1,265

2,370

3,306

3,971

4,835

5,322

5,391

5,368

5,331

5,356

5,369

3,201

2,168

56

94

29

30

29

35

33

33

33

34

38

21

17

1,208

2,276

3,277

3,941

4,806

5,287

5,358

5,344

5,298

5,322

5,331

3,180

2,151

Ｆｉｓｈｅｒｉｅｓ

22

26

18

15

13

10

9

8

7

8

9

7

2

Ｍｉｎｉｎｇ

48

42

18

15

13

10

9

8

7

8

9

4

1

Ｃｏｎｓｔｒｕｃｔｉｏｎ

88

198

305

427

462

551

563

548

544

539

520

440

80

Ｍａｎｕｆａｃｔｕｒｉｎｇ

451

799

1,144

1,135

1,306

1,307

1,307

1,258

1,223

1,205

1,185

793

392

Ｗｈｏｌｅｓａｌｅ ａｎｄｒｅｔａｉｌ ｔｒａｄｅ；ｆｉｎａｎｃｉｎｇ ａｎｄｉｎｓｕｒａｎｃｅ；ａｎｄ ｒｅａｌ ｅｓｔａｔｅ

162

449

731

1,003

1,288

1,399

1,407

1,426

1,428

1,426

1,423

699

724

Ｔｒａｎｓｐｏｒｔ ａｎｄｃｏｍｍｕｎｉｃａｔｉｏｎ
ａｎｄｅｌｅｃｔｒｉｃｉｔｙ，ｇａｓ，ｗａｔｅｒａｎｄ ｈｅａｔ ｓｕｐｐｌｙ

161

237

340

362

384

426

426

422

423

427

421

341

80

Ｓｅｒｖｉｃｅｓ

175

388

558

788

1,142

1,361

1,408

1,432

1,434

1,478

1,536

718

818

Ｇｏｖｅｒｎｍｅｎｔ

120

-

161

199

195

214

215

217

214

214

211

166

46

Ｔｏｔａｌ
Ａｇｒｉｃｕｌｔｕｒｅ
ａｎｄ ｆｏｒｅｓｔｒｙ

Ｎｏｎ−ａｇｒｉｃｕｌｔｕｒａｌｉｎｄｕｓｔｒｉｅｓ

Source:Ministry of Public Management,Home Affairs,Posts and Telecommunications,
Annual Report on the Labour Force Survey

Note:

Figures for 1980 and thereafter include Okinawa prefecture

FemaleFigure 4Sony’s R&D and Manufacturing System in 1999
Organization of headquarter

Company(desigining and
R&D of products)

Television,
Audio
Solectron(American)

・AV(video,acoustics),
IT(information technology)
・device・semiconductor

Battery,
Recording media

Broadcasting
equipments, systemfor business

Semiconductor
EMCS(manufacture,Engineering,
physical distribution) ManufacturingAnd
Customer Services
Contacting
Corporation

Partnership

Figure 5 Four Types of Organizational StructureManagement organization
HierarchicalMechanistic
8 (5.7%)

Hierarchicalorganic
94 (64.3%)

Tightly-structured
Organization
Work organization
Flat
Mechanistic2(1.4%)

Flat
Organic
36(25.7%)
Loosely-Structured
Organization

Figure 6 Number of Employees by Occupation
Professional andtechnical workers

1600

Manager and officials(10,000persons)

1400
1200

Clerical and related
workers

1000

Sales workers

800
Agricultural, forestry
and fishries workers

600
400
200
0
1970

1980

1990

1998

1999

2000

2001

Workers in transportand communications
occupations
Craftsmen,
manufacturing andconstruction workers
Labourers 1)

Figure 7 Trends in Number of Workers by Occupation
250,000

200,000

SE
PG
Resercher
Management or Sales
Others
Dispached or Loaned

person150,000

100,000

50,000

0
1989

1990

1991

1992

1993

1994

1995
year

1996

1997

1998

1999

2000

2001

Source; Ministry of Economy, Trade and Industry, Field Report on Service Industry in 2001 (December, 2002)

Figure 8 Number of Registered Workers and Number of Actually-worked Registrants
800,000

700,000

695,045

600,000
572,421

person471,658

469,339
436,336

400,000

Number of Registered Workers at General
Lease Companies
Number of Part-time Employees at General
Lease Companies
Number of Regular Employees at General
Lease Companies
Number of Regular Employees at Specific
Lease Companies

503,156

500,000

437,000

382,070

300,000

200,000

100,000

179,774
105,568
80,55647,632

130,601
87,61364,929146,703
111,61780,90969,553

97,63069,934
68,41699,421
69,996
68,883112,240
73,087
69,63082,886
68,941

93,957
66,328

0
1990

1991

1992

1993

1994
year

1995

1996

1997

Figure 9 Estimated Unionization Rate
(%)
50

46.2

40
32.2

35.4
30.8

30

25.2

22.6

22.4

22.2

21.5

20.7

1997

1998

1999

2000

2001

20
10
0
1950

1960

1970

1980

1990

Ｔａｂｌｅ 2 Ｔｒｅｎｄｓ ｉｎ Ｎｕｍｂｅｒ ｏｆ Ｌａｂｏｕｒ Ｄｉｓｐｕｔｅｓ，Ｅｍｐｌｏｙｅｅｓ Ｉｎｖｏｌｖｅｄ，ａｎｄ Ｗｏｒｋｉｎｇ Ｄａｙｓ Ｌｏｓｔ

(Disputes,1,000employees,1,000day)

Ｊａｐａｎ １）

Ｕｎｉｔｅｄ Ｓｔａｔｅｓ ２）

Ｇｅｒｍａｎｙ ３）

Ｉｔａｌｙ ４）

Ｕｎｉｔｅｄ Ｋｉｎｇｄｏｍ ５）

Ｉｎｄｏｎｅｓｉａ ６）

Ｍａｌａｙｓｉａ ７）

Ｔｈａｉｌａｎｄ ８）

Ｄｉｓｐｕｔｅｓ
Ｅｍｐｌｏｙｅｅｓ ｉｎｖｏｌｖｅｄ
Ｗｏｒｋｉｎｇ ｄａｙｓ ｌｏｓｔ
Ｄｉｓｐｕｔｅｓ
Ｅｍｐｌｏｙｅｅｓ ｉｎｖｏｌｖｅｄ
Ｗｏｒｋｉｎｇ ｄａｙｓ ｌｏｓｔ
Ｄｉｓｐｕｔｅｓ
Ｅｍｐｌｏｙｅｅｓ ｉｎｖｏｌｖｅｄ
Ｗｏｒｋｉｎｇ ｄａｙｓ ｌｏｓｔ
Ｄｉｓｐｕｔｅｓ
Ｅｍｐｌｏｙｅｅｓ ｉｎｖｏｌｖｅｄ
Ｗｏｒｋｉｎｇ ｄａｙｓ ｌｏｓｔ
Ｄｉｓｐｕｔｅｓ
Ｅｍｐｌｏｙｅｅｓ ｉｎｖｏｌｖｅｄ
Ｗｏｒｋｉｎｇ ｄａｙｓ ｌｏｓｔ
Ｄｉｓｐｕｔｅｓ
Ｅｍｐｌｏｙｅｅｓ ｉｎｖｏｌｖｅｄ
Ｗｏｒｋｉｎｇ ｄａｙｓ ｌｏｓｔ
Ｄｉｓｐｕｔｅｓ
Ｅｍｐｌｏｙｅｅｓ ｉｎｖｏｌｖｅｄ
Ｗｏｒｋｉｎｇ ｄａｙｓ ｌｏｓｔ
Ｄｉｓｐｕｔｅｓ
Ｅｍｐｌｏｙｅｅｓ ｉｎｖｏｌｖｅｄ
Ｗｏｒｋｉｎｇ ｄａｙｓ ｌｏｓｔ

1985
627
123.4
264.1
54
323.9
7,079.1
−
78.2
34.5
1,341
4,842.8
3,830.8
903
791.3
6,402.0
78
21.1
557.0
25
9.0
36.0
4
0.6
13.1

1990
284
84.3
144.5
44
184.9
5,925.5
777
257.2
363.5
1,094
1,634.0
5,181.3
630
298.2
1,903.0
61
31.2
316.6
17
98.5
302.0
9
4.3
71.6

1996
1997
193
178
23.2
47.2
42.8
110.2
37
29
272.7
338.6
4,888.6 4,497.1
200
144
165.7
13.5
98.1
52.9
791
1,689.0
1,930.0
244
216
364.3
130.0
1,303.0
234.7
346
234
221.3
145.6
2,496.5 1,250.4
9
4
1.0
0.7
2.6
2.1
18
23
8.7
11.9
92.1
150.6

1998
145
26.0
98.0
34
387.0
5,116.0
46
4.0
2.0
1,103
435.4
580.4
166
91.0
282.0
−
−
−
12
1.8
2.7
−
−
−

Ｓｏｕｒｃｅｓ：

Ｊａｐａｎ：Ｍｉｎｉｓｔｒｙ ｏｆ Ｈｅａｌｔｈ，Ｌｏｂｏｕｒ ａｎｄ ｗｅｌｆａｒｅ，Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｎ Ｓｔａｔｉｓｔｉｃａｌ Ｓｕｒｖｅｙｓ ｏｆ Ｌｏｂｏｕｒ Ｄｉｓｐｕｔｅｓ.
Ｇｅｒｍａｎｙ：Ｇｅｒｍａｎ Ｆｅｄｅｒａｌ Ｓｔａｔｉｓｔｉｃａｌ Ｏｆｆｉｃｅ，Ｓｔａｔｉｓｔｉｓｃｈｅｓ Ｊａｈｒｂｕｃｈ １９９７.

Ｏｔｈｅｒｓ：ＩＬＯ，Ｙｅａｒｂｏｏｋ ｏｆ Ｌａｂｏｕｒ Ｓｔａｔｉｓｔｉｃｓ.

Notes:

1)Disputes that last under a half day are excluded. The employees involved isthe number of workers who actually took part in the dispute.
2)The number of disputes and the employees involved are for disputes that began
during the year in question,excluding disputes involving under 1,000 employees
and disputes lasting under one day.
3)Localized (disputes on the single-enterprise level), agricultural ,and civil service
disputes are excluded Starting in 1985,the number of disputes is in establishment units.
The number of employees involved is calculated from the average number of
empl4)Prior to 1992 data refers to formerF.R. of Germany.After 1993 data refers to All
Germany.The employees involved and working days lost on March 10,1990 and earlier arefor former F.R.of Germany.When the working days lost exceeds 100,disputes lastingunde5)The working days lost is calculated by the standard of a 7-hour working day.
6)When the working days lost exceeds 100,disputes lasting under one day and those
involving under 10 employees are included.The number of disputes excluded politicalstrikes.
7)The working days lost is calculated by the standard of a 7-hour working day.
8)Only syrikes are included.

Figure 10 Ratio of labor unions by solvers of negotiate and sessions
0

10

20

30

40

50
52.0

Wage
Working hours

45.6

Employment and Personnel affairs

32.1

Child-care leave system, care leave sysytem
Training

23.3
25.7

17.0

WelfareEqual treatment of male employee and female
employee
management policy
Conclusion renewal, or revision of comprehensive
collective agreement
Interpretation and criticism of collective agreement

63.8

31.9

(%)

Session through labour
management consultaition
organizaition(with labor
management consultaition
organization)

57.2
31.3

Session through collective
barganing(with labor
management consultaition
organization)

19.3
53.0

18.4
9.7

58.9
63.1
61.5
57.1

43.4

41.8

8.6

70

32.7

9.0
12.5

Working environment
Health management

60

30.7
24.6

14.0
15.5

49.7
20.6
31.6

19.6
18.0
11.7
14.4

25.3

Session through collective
barganing(without labor
management consultaition
organization)

Figure11 Issues predicted in industrial relations0
Job security
Job security upto 65 years old
Number of employees.Dispatch and separation
Transfer
Reforms of wages
Bonus and allowances
Reforms of retirement allowance and company pension.Reforms of fringe benefits
Shorter work hours
Flexible working hours
Improvement of working environment
Mental health
Restructuring of human resourcedevelopement
Reforms of wage system and evaluation system.Grievances of wages and evaluation.Not specified

10

20

30

40

50

60

70

51.8
43.9
34.2
39.5
24.6
50.0
57.0
64.0
29.5
21.9
10.5
14.0
36.0
16.7
61.4
21.9
10.5

Figure 12

Nikkeiren employability model
Capability earned through the support by the company and work.

A

C

B

Capability earned by self-reliance.

(account) Employability = A + B = capability needed for employment
A = Capability which enables labor movement.
B = Capability which makes it possible to be demonstrated in the company and to be employed continuously.
C = Capability demonstrated by both of the inside of the company, and outside.
A−B = Capability which cannot be demonstrated in the company.
B−C = Capability which can be demonstrated only in the company.
※Each circle expresses with a size about various capability which constitutes Employability for convenience.
※ About whether it is “Capability earned through the support by the company and work” or each capability
is ”Capability earned by self-reliance”, it classified with the dashed line.

Figure 13

Change of Qualifications Ladder
Former Qualification SystemsystemhigherSanyo

Job broad banding system

1
Shoku
-gun

2
Shoku
-gun

3
Shoku
-gun

4
Shoku
-gun

Shuji
ShukanQualification

Qualification
Shuji

Shuji

First-class Shuin

First-class Shuin

Second-class Shuin

Second-class Shuin

Discussion Paper
No.
2002・1

AuthorNobuyuki Isagawa

2002・2

Nobuyuki Isagawa

2002・3Mahito Okura

2002・4

Elmer Sterken
Ichiro Tokutsu
Mahito Okura
Mahito Okura
Nobuyuki Isagawa
Koji Okubayashi
Toshinori Takashina

2002・5
2002・6
2002・7
2002・8

2002・9Hajime Shimizu

2002・10 Nobuyuki Isagawa
2002･11

Nobuyuki Isagawa

2002･12Kenji Kutsuna
Richard Smith

2002・13 Kunio Miyashita
2002・14 Hajime Shimizu
2002・15 Hajime Shimizu
2002・16 Koji Okubayashi
2002・17 Fumitoshi Mizutani
Shuji Uranishi
2002・18 Kazuhisa Otogawa
2002・19 Atsuo Takenaka
2002・20 Tsuneo Nakano

2002・21 Tsuneo Nakano
2002・22 Fumitoshi Mizutani
Shuji Uranishi
2002・23 Atsushi Takao
Mahito Okura
2002・24 Fumitoshi Mizutani
2002・25 Fumitoshi Mizutani
Takuya Urakami
2002・26 Yasuyuki Miyahara
2002・27 Nobuyuki Isagawa
2002・28 Mitsutoshi Hirano

Title
Cross Holding of Shares, Unwinding Cross Holding of
Shares, and Managerial
Entrenchment
A Theory of Stock Price Behavior following Repurchase
Announcements
An Equilibrium Analysis of the Insurance Market
with Vertical Differentiation
What are the determinants of the number of bankrelations of Japanese firms?
Review Article：Adverse Selection in Insurance Market
Welfare Effect of Firm Size in Insurance Market
Does Investment Horison Affect Investment Strategy ?
Research Report of Careers and Employment Process ofWorkers over 60 years old :a Case of a Japnaese
Manufacturing Company
On the Existence of Tax Equilibrium : Incomplete Market
with Capital Income Tax
Cost of Financial Distress and Debt Restructuring :Debt Forgiveness and Equity-for-Debt Swap
Open-Market Repurchase Announcements, Actual
Repurchases, and Stock Price Behavior in Inefficient
Markets―revised version of No.2001･36―
Why Does Book Building Drive Out Auction Methodsof IPO Issuance?
Evidence and Implications from Japan
International Logistics and Modal Choice
Incomplete markets with capital income tax and public
goods
On the possibility of Pareto improving of tax-equilibrium
China-Japan Comparison of Work Organization
The Post Office vs. Parcel Delivery Companies:
Competition Effects on Costs and Productivity―revised version of No.2001･33―
Earnings Forecast and Earnings Management of JapaneseInitial Public Offerings Firms
The Classification of Foreign R&D Units
The Dutch East India Company and its Corporate
Governance―revised version of No.2000･40―
The British East India Company and its Corporate
Governance
Privatization Effects on TFP Growth and Capital
Adjustments
Some Notes on the Privatization of Postal Life Insurancein JapanPrivately Owned Railways’ Cost Function, Organization
Size and Ownership
A Private-Public Comaprison of Bus Service Operators
Principal-Multiagent Relationships with Costly
Monitoring
Unwinding of Cross Shareholding under Managerial
Entrenchment
Contingency Model for Personnel Grading System―Issues on Design and Management for Qualification
System and Job Grading System―

Date(in Japanese)

1／ 2002(in Japanese)

1／ 20022／20023／2002(in Japanese)(in Japanese)(in Japnaese)

3／20023／20023／20024／2002(in Japnaese)

4／2002(in Japnaese)

4／20025／20025／2002(in Japnaese)(in Japnaese)

6／20026／20026／20027／20027／20028／2002(in Japanese)(in Japanese)

8／20028／2002(in Japanese)

8／20028／2002(in Japanese)

9／20029／20029／2002
10／2002
10／2002(in Japanese)

11／2002

Discussion Paper
No.
Author
2002・29 Atsushi Takao
2002・30 Yasuhiro Shimizu
2002・31 Hideki Murakami
2002・32 Atsushi Takao

2002・33 Nobuyuki Isagawa

2003・5

Takuji Hara
Katsuhiko Kokubu
Kazuhiro Tanaka
Fumitoshi Mizutani
Shuji Uranishi
Yang Jia Yin
Koji Okubayashi
Mitsutoshi Hirano

2003・6

Kazuhisa Otogawa

2003・7

Nobuyuki Isagawa
Tadayasu Yamashita
Kenji Kutsuna
Marc Cowling

2002・34
2003・1
2003・2
2003・3
2003・4

2003・8

2003・9

Noriko Masumura

2003・10 Nobuyuki Isagawa
Katsuhiko Okada
2003・11 Mitsutoshi Hirano
2003・12 Kenji Kutsuna
Richard Smith
2003・13 Kenji Kutsuna
Janet Kiholm Smith
Richard L. Smith
2003・14 Hideya Kubo
2003・15 Hideki Murakami
2003・16 Norio Kambayashi
2003・17 Nobuyuki Isagawa
2003・18 Nobuyuki Isagawa
2003・19 Huang Lin
2003・20 Koji Okubayashi
2003・21 Nobuyuki Isagawa

Title
On the Emergency Effect of the late FUKUZAWA,
Yukichi in Introducing of Modern Insurance into Japan
Amortization of Intangible Assets before Newark
Morning Ledger
An Economic Analysis of Duopolistic Competition
between Gulliver and Dwarf airlines:
The case of Japanese Domestic Air Markets
Simulation Model to Consider the Penetration of Modern
Insurance in Japan −Confirmation of Emergence andPhase Transition of New Japanese Risk-Bearing System
by Evolutional Economics
Mutual Shareholding and Unwinding of Mutual
Shareholding as Stockpile for Business Recovery
TLOs in Japan in the life science area : present and future
Environmental Accounting for Corporate Management
Embeddedness and Entrenchment of Managers
The Effects of Privatization on TFP Growth and Capital
Adjustments
Labour Turnover of Japan-Affiliated Companies inShanghai
Generation and Resolution of Asymmetric Information in
Human Resource Management –In the Cases of Job
Rotation in Two Retailers in JapanMarket Liquidity around Quarterly Earnings
Announcements
Lender’s Risk Incentive and Borrower’s Risk Incentive
Determinants of Small Business Loan Approval:
Evidence from Japanese Survey after 1997 Financial
CrisisVoluntary Corporate Disclosure and the Cost of Debt:
The Case of Quarterly Reporting
Corporate Financial Strategy and Stock Price Behavior
in a Noise Trader Model with Limited Arbitrage
Two Modes of Economic Organization in the Duality
Principle and Asymmetric Personal Information
Why Does Book Building Drive Out Auction Methods of
IPO Issuance? Evidence from Japan (Revised version)
Banking Relationships and Access to Equity CapitalMarkets:
Evidence from Japan’s Main Bank System
The Present Condition and Problem of JapaneseCorporate Pension Systems
An empirical analysis of the spillover and dynamic
effects of low-cost airline’s presence on rival’s price:
US duopoly case
Japanese Style of Management Education
Unwinding of Cross Shareholding for BusinessRestructuring
Unwinding of Cross Shareholding: A Signalling
Approach
Strategies and Store Development of Carregour in the
Chinese Continent
Emp lo yme nt Situation and Measur es for
In cr easing Emp lo yme nt Oppor tun ities;
Th e Cas e o f Jap an
L end er ’s Risk In cen tiv e and D eb t Forg iv ene ss(in Japanese)Date
11／2002(in Japanese)

11／2002
11／2002(in Japanese)

12／2002

12／2002(in Japanese)(in Japanese)(in Japanese)

12／2002
1／20032／20032／2003(in Japanese)

3／2003(in Japanese)

3／20033／2003(in Japanese)

3／20033／2003(in Japanese)

4／20034／2003(in Japanese)

5／20035／20035／2003(in Japanese)

6／2003(in Japanese)

7／2003(in Japanese)(in Japanese)

7／20037／2003(in Japanese)

7／2003(in Japanese)

8／20038／20038／2003

Discussion Paper
No.
Author
2003・22 Keizo Mizuno
Fumitoshi Mizutani
Noriyoshi Nakayama
2003・23 Kenji Kutsuna
Nobuyuki Harada

2003・24 Shigeki Sakakibara
Takashi Yamasaki
2003・25 Michihiro Ozawa
2003・26 Atsushi Takao

2003・27 Koji Okubayashi

Title
Industrial Diversity and Metropolitan Unemployment
Rate

Date
9／2003

Small Business Managers as Latent Informal Investors inJapan:
Evidence from a country with a bank-based financial
systemThe First Half of The Year Effect in Japanese Stock (in Japanese)
MarketAudit Risk Model with conditional probability and the (in Japanese)
importance of risk assessment
A Note on the Securitilization of Catastrophe Risk
(in Japanese)〜 A Study by Especially Attention -Focusing toInsurance Linked Securities 〜
Industrial Relations in a Changing Economy: Japan’s
Experience

9／20039／2003
10／2003
10／2003

11／2003