A Comparison of Subcontracting Work between Japanese Electrical Machinery and Steel Industries

New type of on-site subcontractors has been expanding in Japan’s electrical machinery industries since the 1990s. This Subcontract workers are characterized by low grade work with low wages, no training, and short periods of employment. In addition, we saw that a tenuous relationship exists between the client companies and the subcontract firm. We regard these factors as mutually complementary. On the other hand, the subcontractors of steel industry also bore the above mentioned characteristics in early days. However, the subcontractors have continued to grow in the scale and level of their work, and working conditions have also improved. Since the mid-1960s, the client companies have started to provide subcontractors with training and manage them strongly; this was triggered by the rationalization of their own staff and expansions in business scale. That training and management are characterized by being involved not only in top management and buyer, but also in shop floor-level organization. To understand the postwar history of steel subcontractor, we must pay attention to the role of labor unions. The subcontractor unions’ Spring Labor Offensive began under the auspices of an industrial labor union(JISU) in the 1960s, and the current system was put in place in the 1970s. The subcontractor unions’ Spring Labor Offensive raised the wage base and concurrently had a leveling effect. JISU played a significant role in such wage campaigns. In the subcontractor history of the postwar steel industry, both labor and management have worked to improve negative cycle such as poor intercompany relations, low wages, unskilled workers, and short-term employment. When we view today’s manufacturing subcontractors in the light of this history, we cannot find the strong power to push up the spiral. We regard that it will not become like that of subcontractors in the steel industry in the near future, given that it employs a business model in which there are an unspecified number of clients and the organization of labor unions is not progressing. Still, in some quarters of electrical machinery, client companies have started reducing the number of subcontract firm, and shop floor organization of client companies have started providing subcontract workers with training like steel companies. We should pay attention to whether the managements and unions of subcontract firms will cultivate better relations with client companies and improve work conditions on this occasion.