The Japanese Labor Movement and Institutional Reform

This paper traces the evolution of the Japanese labor movement's stance toward institutional change from the early post-World War II era to the present. It argues that, like most labor movements, the Japanese movement began as a movement that promoted the wholesale reconstruction of national political economic institutions. However, over time, its role vis-à-vis institutional change shifted. By the 1970's, rather than being a force devoted to precipitating wholesale institutional change, the Japanese labor movement shifted to a stance of active defense of institutional status quo in both industrial relations and the Japanese political economy writ large. Recently, however, the movement is showing signs that it may be altering its stance once again. I use the concept of "social contract" to make sense of these shifts in the labor movement's stance toward institutional change. I argue that the earlier shift from that of promoting institutional change to a defense of the status quo can be understood to be a byproduct of the establishment of a social contract acceptable to organized labor that was forged between business, labor and government. The recent initial steps toward an alteration in that stance, in turn, is argued to be a consequence of a perceived breakdown of that social contract precipitated by Japan's prolonged recession of the 1990s and increased international competitive pressures.