Rage Of Mechanical Reproduction

ontract labour—or “non-permanent workers” as they are called in Japan—is today a way of life for most Japanese companies, especially those in manufacturing. The age-old, contentious issue that played a key role in the violence at Maruti Suzuki’s Manesar plant has also caused serious problems for Japanese companies within their own country and elsewhere. For instance, Japanese firms have been facing labour protests at regular intervals in China, where there are over 10,000 Japanese enterprises, and also, as recently as a few weeks back, in Indonesia. A Japanese diplomat who visited Jakarta recently said a large number of workers had demonstrated before the Japanese embassy there early this month demanding pay hikes.

The rising income disparity, due to the separated categories of permanent and non-permanent workers, is acknowledged by the Japanese government and its industrialists. For several years now, sections of Japanese society have been debating the issue. A report by Japan’s Research Institute of Economy, Trade and Industry (RIETI) highlighted it in September 2010. There has been a “rapid increase in the proportion of non-permanent workers in the workforce since the ’90s,” it points out, and observes that “Japanese manufacturers, up against fierce price competition in the international market, are becoming more dependent upon these workers in order to achieve a reduction in labour cost.”

But it argues that “it is crucial for an institutional mechanism to be put in place to ensure that the risk the non-permanent workers have to bear is efficiently distributed.” The report warned, “Otherwise, the labour market could become extremely polarised, resulting in further social division.”

Much of the problem stems from Japan’s industries’ attempt to strike a balance between their unique work culture and to keep that relevant in the teeth of stiff competition in a globalised economy. Till a few decades back, Japanese firms were known for their work ethics, where workers were well looked after. There were no separate canteens for workers and executives, and “discipline, punctuality and harmony” were key words defining the work culture.

Most of those who joined these companies saw it as a life-time employment and grew within the organisation, effectively tying their personal ambitions with that of the corporate body with a profit motive. But things started changing since the 1990s, with increasingly cut-throat international competition, and with the opening up of the Japanese economy to foreign investors and companies. The new entrants, especially the American firms, brought in “performance-related” pay hikes and benefits—something that was absent from Japanese work culture earlier. Some critics say that in order to protect a small section of their permanent employees and to face fresh challenges brought on by new competitors, Japanese companies started bringing more and more non-permanent workers into their fold.

Though there are different categories of non-permanent workers with varying contracts, the economic disparity between them and permanent workers has created serious social and economic problems for Japan. “Though large numbers of people in Japan would still consider themselves middle income group, these policies have led Japan to have one of the largest sections of poor people among the OECD countries,” Tamaki Tsukada, minister (economic) of the Japanese embassy in New Delhi, told Outlook.

This, coupled with an ageing workforce, led many Japanese firms to look elsewhere and set up shop in neighbouring Asian countries where the cheap cost of labour—since most recruits are non-permanent workers—would continue to keep the companies competitive and bring in profits.

While India’s South Block mandarins are predictably upset about the potential impact of Manesar, the Japanese have shown great restraint in their criticism about the industrial climate in India. This is a significant departure from the sharpness with which Japan reacted during the violence at Hero Honda’s Manesar plant in 2005. In the past few years, Japan’s footprint in India has increased rapidly, and it is in the midst of negotiations with the Indian government on quite a few mega projects. There’s a lot at stake.