‘Same work, same pay’ goal may spark a race to the bottom

Prime Minister Shinzo Abe has recently come out to make the case for “same work, same pay.” Call me a cynic, but I suspect an ulterior motive. For years, the ruling Liberal Democratic Party’s policies have focused on helping prop up struggling corporations and their managers, with working people treated as more of a nuisance. It is therefore hard to believe that the LDP has suddenly grown a heart that aches over the travails of millions of unemployed, underemployed, underpaid, unpaid and otherwise un-somethinged workers.

Let’s look at the government documents distributed at the ninth conference for the Japan Plan for Dynamic Engagement of All Citizens (the odd fixed English translation of Ichioku Sokatsuyaku Kokumin Kaigi), held June 2.

The name of this plan riffs discordantly on the prewar “Ichioku sōgyokusai” slogan used to mobilize the citizenry for war. That phrase referred to all Japanese sacrificing themselves like gyokusai, or shattered jewels, for the sake of the Emperor. Abe continues to try to return Japan to what he and many other nationalists see as the country’s glorious fighting past, setting aside the tragic outcomes that don’t fit the sparkling narrative.

The documents include the following statements:

• “Improving conditions for irregular and contingent workers, who make up about 40 percent of Japan’s workforce, is of pressing importance, in order to expand flexible and diversified work choices for youth and women. Wages of part-time workers are 20 percent below those of regular workers in European countries, but 40 percent lower in Japan. We will ensure parity and equal treatment regardless of type of employment, regular or irregular, in order to create a society conducive to second chances.”

• “We will advance preparations to amend laws without hesitation in order to realize equal work, equal pay, while giving due consideration to our country’s employment customs. We will draft guidelines that indicate examples of reasonable and unreasonable disparities in order to ensure the proper functioning of the Labor Contract Law, Part-Time Labor Law and Worker Dispatch Law.”

• “We will submit a bill to the Diet after deliberating on the overhaul of the Labor Contract Law, Part-Time Labor Law and Worker Dispatch Law, including creating regulations to serve as the basis for court rulings related to unreasonable disparities and putting the obligation on employers to explain disparities between regular and irregular employees, all while using the European system as reference. The aim will be to create standards regarding pay parity between regular and irregular workers that match those of European countries.”

‘Same work, same pay” is a phrase that is suddenly in vogue now that Abe has begun calling for it. But what does it actually mean?

It’s actually quite simple. It means employers pay the same wages to workers, regardless of regularization status, for the same work and to those with the same work experience.

The aforementioned government conference documents state that the same work, same pay principle is already systematically embedded in Europe. It’s true that 1997 EU labor regulations, 1999 fixed-term worker rules and 2008 temporary agency work rules require all EU member nations to comply with the same work, same pay principle. These rules prohibit employing irregular workers on conditions inferior to regular employees doing the same work, barring objectively reasonable grounds. Even when such grounds exist, working conditions must comply with the principle of “hour proportionality.” The laws also require employers to provide their workers with information regarding switching from part- to full-time positions or vice versa.

This principle has not been recognized in Japan. Labor law here forbids discriminatory treatment due to nationality, creed, social position (Article 3 of the Labor Standards Act) or gender (Article 4). But discrimination based on employment type is not prohibited by this law. However, Article 20 of the amended Labor Contract Law prohibits “unreasonable working conditions due to the labor contract being fixed-term,” and Article 9 of the amended Part-Time Labor Law “prohibits discriminatory treatment of part-time workers who can be seen as the same as seishain (regular) workers.” So the law is making modest progress, but not to the point of guaranteeing same work, same pay.

Such a principle would be a bold reform that would overturn decades of labor practice. Consider a workplace where an irregular employee makes ¥1,000 an hour whereas a regular worker makes a monthly wage that works out at ¥2,000 an hour. If the irregular worker’s wages are adjusted up to match the regular worker’s, the employer would have to double the former’s pay. If the regular worker brings home an annual bonus of ¥1 million, the irregular worker would also have to be paid that.

Few irregular workers receive a bonus in Japan. This is a major reason why such a disparity exists between the two groups. Employers would see labor costs skyrocket if they have to raise the conditions of irregular workers to meet those of their regular counterparts.

The reason Japan has never followed the same work, same pay principle lies in the country’s employment practices. The three “sacred treasures” (jingi) of Japanese-style employment have been lifetime employment, seniority-based wage scales and company (i.e., sweetheart — company-influenced) unions. Although these employment practices are collapsing around us, the notions remain.

In principle, if not always in practice, regular employees work until retirement at the same company and see their wages rise each year along with their seniority. Irregular employees are considered to be out of the loop — they don’t get any of the sacred treasure: They usually don’t enjoy a seniority wage scale; they usually aren’t expected to stay at the same workplace until retirement; they are treated as stopgap filler during labor shortages.

The difference between regular and irregular workers in Japan is not just one of work duties or work hours. It’s an extreme disparity of social position, spanning the totality of one’s career. For instance, mortgage lenders are far less likely to approve loans to irregular workers.

Wages for regular workers in Japan are not determined by work duties. Such workers are expected to stay until retirement and be trained broadly but shallowly in various departments throughout the company. Wages are set with all this in mind. This is why in Japan, the right of employers to give work orders extends quite broadly, and it is common for employers to give work-duty instructions and even transfer employees unilaterally. In return, so to speak, workers know that their wages will automatically increase each year along with their seniority, and that they can expect promotions and a high degree of job security.

But that ain’t how it works for irregular workers. As I said, they are treated as filler and often do not enjoy any of the three sacred treasures.

Irregular workers usually last at most two or three years and don’t get paid the same wage even if they happen to do the same duties as their regular counterparts. Courts have upheld this Japanese-style employment system — meaning different pay for the same work — as perfectly legal. (Strictly speaking, Nagano District Court ruled in the Maruko Keihoki case in 1996 that irregular workers doing the exact same work with the same years of experience as a seishain cannot be paid less than 80 percent of the regular worker. However, this famous case has had little impact on industrial relations in Japan, and many employers pay far less than this 80 percent to nonregular workers.)

Bridging the deep gorge between two types of workers by realizing equal work, equal pay will be easier said than done. Abe is shouting the concept from the mountaintops, but it is unclear how serious he is about it. I cannot shake the suspicion that he is using the idea as a way to puff up his reputation ahead of the Upper House elections on July 10.

A major concern of mine is which direction the adjustment will go. Will it involve raising the conditions of irregular workers to meet those of regular ones, or the other way around? Or will it entail a compromise midway point? Civil rights activists in Japan are getting bogged down in internecine fighting, unfortunately, instead of coming together on this issue.

It’s crucial that labor and union activists don’t collapse into internal conflict when discussing and debating the same work, same pay principle. Some people have attacked regular workers, claiming that many are lazy incompetents who have less skills than the irregular workers who work so hard for lower pay. Some accuse seishain of being “wage thieves” whose work does not merit such high remuneration. Others hope that the ire of irregular workers can be used to disparage regular workers.

If labor activists fall into these traps, they will forget who the real enemy is (i.e., management) and end up lowering the conditions of regular employees. This will benefit that real enemy. We must be on our guard in case the government’s real motive hidden behind this wonderful idea is to pit regular employees against their irregular coworkers.

Hifumi Okunuki teaches at Sagami Women’s University and serves as executive president of Tozen Union. She can be reached at tozen.okunuki@gmail.com. Labor Pains appears in print on the fourth Monday Community Page of the month. Original story published in the Japan Times.