Pink Slips Come With a Big Heart In Japan Layoffs

Closure of a coal mine shows how Japan treats workers to keep unemployment low

A Japanese flag quivers from a rooftop flagpole over a hole in the ground called the Mikawa incline, the main entrance to Japan's biggest and oldest coal mine. The wind has shredded the banner nearly in half, the red rising sun now a jagged semicircle.

On March 30, the Mitsui Coal Mining Co. shut down the Miike mine, one of the final acts in the withering of Japan's once-extensive coal industry. At Mikawa, equipment rusts, weeds prosper, stray cats wander. "It really feels dead," sighs miner Tadashi Irifune.

Despite this air of decay, there is also something enduring here - the respect that corporate Japan maintains for its workers. Roughly 900 miners and 300 other employees have been dismissed, but union leaders say the process has been fair.

On average, the Miike workers leave their jobs with more than $100,000 in lump-sum severance payments, plus pensions down the road.

Not only has the government provided a quarter of the total cost of shutting down the mine, but Mitsui Coal Mining and employee unions have negotiated the closure without demonstrations, slowdowns, or strikes.

Miike's size and history - its coal fueled both the war machine of Imperial Japan and the initial stages of the country's post-World War II economic boom - make it exceptional.

Those dismissed from other mines have not been treated as generously.

Other kinds of workers in modern-day Japan are finding that the system of lifetime employment and seniority-based promotions and pay hikes is being modified at their expense. Women and part-timers generally have been denied these benefits.

But in many ways Japan remains a workers' paradise. The unemployment rate, at 3.4 percent despite nearly a decade of economic stagnation, is the envy of the industrialized world.

Companies routinely sacrifice efficiency in order not to let workers go. When they do, the process has little of the brutality and suddenness that have come to characterize layoffs and factory closures elsewhere.

This corporate kindness may not last forever.

Haruo Shimada, a labor economist at Keio University in Tokyo, says Japan's "caring mentality" is a product of post-World War II economic success.

As the working population declines and rapid growth becomes an even more distant memory, "the Japanese economy will not be able to afford this kind of lavish treatment," Professor Shimada says.

A company man

In a gray-stone office building in central Tokyo, Minoru Sasaki, a gray-suited Mitsui Coal Mining personnel officer, considers the relative ease with which managers in other countries can get rid of employees. "To be honest," he says, "I sometimes feel envious of labor practices overseas." But he explains that in Japan, things are different.

First there is the matter of corporate image. A company that lays off employees because of a business slump is seen as a "villain," Mr. Sasaki explains. If an entire industry collapses, as coal has done in Japan, letting go of workers has to be done with a sense of "responsibility," he adds, which means providing severance packages and arranging job offers at related companies.

In the case of Miike, the company also had a lot of help from the government. It is costing Mitsui 40 billion yen ($357 million) to close the mine, Sasaki estimates, of which the government is providing 11 billion yen.

The government role makes sense - coal mines owned by Mitsui and other companies were managed under official control during the decades before World War II. As Japanese coal became increasingly uncompetitive in the postwar era, the government gradually decreased the level of subsidy. There were 370,000 Japanese coal workers in 1971; by 1989 the number had dropped to around 9,000.

Even with government help, Japanese workers - relatively highly paid and digging ever-deeper mines - could not compete with Australian coal imported at a third or even a quarter of the domestic cost. In 1992, the government announced that it would end all coal subsidies by 2001, signaling the end for Miike and other mines. Just two coal pits remain in Japan.

Union leaders

Mr. Irifune is having a hard time letting go. A senior member of the union that represents almost all of the miners, he says he sometimes used to feel more relaxed with his colleagues than with his own family.

"People think miners just do it for the money," he says, standing outside the entrance to the Mikawa incline, where railway tracks and a string of light bulbs lead down into a chilly blackness. "But it's not that simple. There's a real satisfaction. This is a job for tough guys."

Mr. Irifune knows Miike's grim past: the use of prisoners and forced laborers from China and Korea; the strike of 1959-1960, which lasted 282 days; the explosion and fire of 1963, which killed 458 miners. At the same time, says this second-generation miner, born and raised in company housing, "Many uneducated men were able to earn a lot, take care of their families, and put their kids through college."

Feelings like Irifune's and a sense of entitlement contributed to the union's strategy: acknowledge the inevitable and cooperate with the company. Union leader Takashi Baba says he spent a lot of time turning away would-be supporters who wanted to protest Mitsui's plan to close the mine.

"With the government watching, we decided that it was better not to strike, sit-in, or demonstrate," Mr. Baba adds. The union used its cooperative attitude as a basis to demand more severance benefits, and won the best settlements in Japanese mining history, according to company and union officials. (See story below)

"The government and the company treated us very well, and their cooperation and goodwill is continuing," Baba concludes.

Irifune's assessment of the severance packages seems a little more tinged by resentment. Paying severance is simply "the company's responsibility," he says. "We are extremely grateful for the support we are receiving, that's true. But the amounts of money aren't that big - most miners would still prefer to keep working."

A stevedore

Not far from the Mikawa incline, at a bar and grill that features chicken-skin kebabs at the impossibly low price of 10 yen (less than a dime), some of the regulars are trying to forget that the mine has closed.

"I don't want to think about the future," says a burly man in a green polo shirt who says he runs a stevedore company but refuses to give his name. "You can't earn any money in a coal-related industry."

His father began the company, which he says once employed 200 workers loading coal onto ships at Omuta's port. Now the firm is down to just two employees - and the man says that no one is offering him any compensation. He figures he can last for about a year, until the stockpile of coal at Miike runs out.

The only bright spot, he adds, is July 10, the day the miners and other workers will get their severance pay. Omuta's bankers, pachinko gambling parlors, and real-estate brokers are fixated on the day, awaiting a surge of cash that will precede the drought.

"Miike is so big and has such a long history," he adds, "people couldn't believe that it would really close."