Information Sharing and Collective Bargaining in Japan: Effects on Wage Negotiation

Abstract

Japanese firms often attempt to influence the process and outcomes of wage negotiation by sharing confidential business information with their unions and employees through the joint consultation system. In this study, using a unique survey of Japanese joint consultation committees conducted in 1981, the author examines the effects of information sharing on the process and outcomes of wage negotiation. The results show that when firms engaged in increased information sharing, negotiation processes were shorter and easier, and unions tended to demand and accept lower wage increases. In contrast, a similar study performed in the United States found that information sharing increased labor's bargaining power.

Is It Good to Talk? Information Disclosure and Organizational Performance in the UK

“…Some of these differences might easily be assigned to national cultural differences working through institutions and the embeddedness of firms in national institutional contexts. Equally, as suggested by Morishima (1991), it may be that different consequences reflect different forms of underlying 'game' -broadly either co-operative or conflictual -between employers and employees and the effect that such games have on the propensity to disclose, although we would concede that national institutions may generate different games.…”

“…Japanese evidence marshalled by Morishima (1989Morishima ( , 1991 yielded very different findings. In his sample, information-sharing was negatively associated with labour costs and positively related to profitability and productivity.…”

“…Specifically, drawing on the goal alignment arguments of Kleiner and Bouillon (1988) and Morishima (1991), we treat the extent of workforce commitment to the organization as a key factor which may affect the impact of information disclosure on performance outcomes. There are, however, different ways in which OC may moderate the impact of disclosure on outcomes.…”

Top wage incomes in Japan, 1951–2005

“…Alternatively, DISP may be capturing the degree of information asymmetry between labor and management as in a standard bargaining model (Ashenfelter and Johnson, 1969;Kennan, 1986). According to Morishima (1991), in Japan, increased information sharing (typically through the establishment of joint labor-management consultation committees) leads to both shorter wage Table A5 for the definitions of other variables. Newey-West standard errors with 8 lags are reported in the parentheses.…”

“…That is, the fall in marginal tax rates in the mid 1990s, the improvement in corporate performance since 2001, and the downward trends in labor disputes with dispute acts since the 1980s are likely to be major driving forces behind the recent increase in wage income inequality, offsetting a negative effect of the declining female labor participation in the 1990s. 1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 Actual Value 1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 Actual Value Fitted Value 19 This is due presumably to labor's better understanding of firm-specific conditions and greater willingness to trade immediate wage gains for long-term benefits such as job security and productivity growth (Morishima 1991). By contrast, Kleiner and Bouillon (1988) find that, in the US, increased information sharing between labor and management is correlated with higher wage settlements for production workers due to labor's ability to make more accurate estimates of firm's profits.…”