Corporate restructuring in Japan is creating inexorable pressure to implement wage restraints. This is evident in increasing efforts to change the traditional seniority-based wage system. Even more significant, these moves are apparent even among companies that are doing well despite the prolonged economic slump. For example, the union at Toyota Motor Co. has given up wage demands for two consecutive years. Canon Inc. has scrapped a pay scale that guarantees an automatic increase in base pay every year.

This clearly shows that the focus of labor-management bargaining has shifted away from wage increases to job security. In fact, this year's "shunto" spring labor offensive marks an end to the "lock-step" wage negotiations of the past, in which wages rose across the board under the aegis of pace-setting unions. In recent years, many companies have tried to hold down labor costs by cutting bonuses and other one-time payments. Now, however, they are moving to readjust the pay system itself.

These developments partly reflect external factors, particularly the sweeping impact of economic globalization -- which has accelerated the cross-border movement of people, money and goods -- and the progress of structural deflation in the global economy. Japan's high wage levels, combined with domestic deflation, are putting downward pressure on wages across a broad spectrum of industries. An international wage comparison of selected countries, based on data from the International Labor Organization, shows Japan ahead of other countries. If the wage level for Japan is figured at 100 (calculated at the exchange rate of 121 yen to the dollar), it is 93 for the United States, 76 for Germany, 85 for Britain, 44 for South Korea and 3 for China. In terms of purchasing power parity, which factors in price levels, the disparities between Japan and these countries become smaller. Still, Japan's wage levels are among the highest in the world, as is its per capita income.