As Toyota donated millions of yen to Japan’s Liberal Democratic Party, labor regulations were loosened to allow temp workers in manufacturing jobs.

Toyota’s Tokyo Headquarters in Koraku, Bunkyo City, Tokyo. Photo by Makoto Watanabe.

Why has non-regular employed increased from 20% to 40% of workers over the past 30 years? First, we introduced a 1995 report by the Japan Federation of Employers’ Associations (Nikkeiren, merged with Keidanren in 2002) titled “Japanese-style Management in the New Era.” Next, we explained how the Worker Dispatching Act was revised in 1999, allowing companies to fill most types of jobs with dispatch workers, in principle.

In both 1995 and 1999, Toyota Motor Corporation was the largest corporate donor to the Liberal Democratic Party (LDP). In 1995, Toyota donated 45.4 million yen, and in 1999 it donated 62 million yen.

Top 10 corporate donors all manufacturers

In 2002, Toyota Chairman Hiroshi Okuda served as chairman of Keidanren. The prime minister at the time was Junichiro Koizumi, whose administration promoted neoliberal policies.

Okuda aligned himself with Koizumi and engaged in politics on an unprecedented level. Keidanren itself explains this period in the “History of Keidanren” section of its website.

“Ever since Chairman Okuda became a private-sector member of the Council on Economic and Fiscal Policy (chaired by Prime Minister Koizumi at the time), Keidanren’s Chairmen have been private-sector members at important government meetings to participate in government policy discussions in a wide range of fields, including economy, government finance, industry, and science and technology.”

Keidanren hoped to lift the ban on temp workers in manufacturing jobs. Although the 1999 legal revision had allowed companies to fill most types of jobs with dispatch workers in principle, manufacturing jobs were exempt. Workers, for their part, worried that regular employees would be replaced by non-regular employees. On the other hand, business leaders argued that the strong yen was causing domestic labor costs to rise, leading to Japanese industry being “hollowed out” as factories moved overseas.

In the end, the ban on temp workers in manufacturing was lifted in 2004. Toyota topped the list of LDP corporate donors that year, giving 64.4 million yen. All of the top-ten corporate donors were manufacturers.

Okuda’s “corporations first” philosophy was evident in a lecture he gave at the Research Institute of Japan (Naijyo) in January 2003. In the lecture, he estimated that Japan’s consumption tax rate would rise to 16% by 2025.

Okuda continued, “Neither individual livelihoods nor Japan’s economy will improve unless corporations become stronger. We can revitalize domestic businesses by significantly reducing corporate tax rates. The fruits of this labor will return to domestic investors in the form of dividends, and to employees and consumers in the form of bonuses, wages, and employment, which will then be used in new capital investment and consumption, creating a virtuous cycle.”

Have things turned out as Okuda promised?

The fiscal year financial results announced in May 2024 saw record highs for many of Japan’s major corporations. Toyota reported profits of approximately 4.9 trillion yen.

At the same time, real wages reported by the Ministry of Health, Labour and Welfare have decreased for 24 consecutive months — the longest period of decline ever, even surpassing the 2008 financial crisis.

Top 50 companies by donations to the National Political Association (recipient of donations for the LDP) in 2004

	Company name	Total(JPY)
1	TOYOTA MOTOR	64,400,000
2	Honda Motor	31,000,000
3	Sony	30,000,000
4	Mitsubishi Heavy Industries	30,000,000
5	Matsushita Electric Industrial	28,240,000
6	TOSHIBA	28,240,000
7	Hitachi	28,240,000
8	Sumitomo Chemical Company	25,000,000
9	Nippon Steel Corporation	25,000,000
10	Takeda Pharmaceutical Company	24,510,000
11	TOA CORPORATION	20,850,000
12	Sumitomo Corporation	20,000,000
13	JFE Steel Corporation	20,000,000
14	MITSUI & CO	20,000,000
15	Mitsubishi Corporation	20,000,000
16	TAISEI CORPORATION	29,960,000
17	Shimizu Corporation	29,900,000
18	Kajima Corporation	19,725,200
19	MAEDA CORPORATION	18,929,600
20	Nomura Holdings	18,800,000
21	MAZDA	18,200,000
22	SUBARU CORPORATION	18,200,000
23	Mitsubishi Electric	18,200,000
24	Nishimatsu Construction	17,080,000
25	ITOCHU Corporation	17,000,000
26	Fujitsu Limited	16,800,000
27	SUZUKI MOTOR	16,200,000
28	TODA CORPORATION	16,080,000
29	OBAYASHI CORPORATION	15,750,200
30	TAKENAKA CORPORATION	15,675,200
31	Daihatsu Motor	15,600,000
32	Daiwa Securities Group	15,000,000
33	NEC Corporation	15,000,000
34	Hino Motors	14,900,000
35	TOENEC CORPORATION	14,000,000
36	Tokio Marine & Nichido Fire Insurance	14,000,000
37	KANDENKO	13,800,000
38	KINDEN CORPORATION	13,000,000
39	Ajinomoto	13,000,000
40	TOPPAN	12,400,000
41	DENSO CORPORATION	12,000,000
42	Nikko Cordial Corporation	12,000,000
43	Nippon Life Insurance Company	11,530,000
44	NGK Insulators	11,000,000
45	IHI Corporation	10,900,000
46	Mitsui Sumitomo Insurance Company	10,500,000
47	THE ZENITAKA CORPORATION	10,208,000
48	ASAHI BREWERIES	10,070,000
49	Asahi Kasei Corporation	10,000,000
49	Suntory	10,000,000
51	Sumitomo Metal Industries	10,000,000
52	Kobe Steel	10,000,000
53	Oji Paper	10,000,000
54	Komatsu	10,000,000
55	Toray Industries	10,000,000

Note: Amounts do not include contributions by group companies or subsidiaries

(Originally published on October 2, 2024.)

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