This study intends to clarify what and how the wage differential in the Japanese automobile industry has been determined by the size of companies. In Japan, mass-production in the automobile industry started around 1960 and the original Japanese suppliers system also started at that time. One of the reasons the car makers adopted the suppliers system was that the wage differential between the car makers and their suppliers was large because the average age of the car makers was older in the late 1950s. Toyota and Nissan had stopped employment after the big labor struggle in the early 1950s. In the 1970s the Confederation of Japan Automobile Workers' Unions (JAW) was established. JAW is composed of the group-wide organizations such as the Federation of All Toyota Workers' Unions and each group-wide organization aimed to unify and stabilize the level of wage rises. The wage differential among the group that includes the car maker and the suppliers has been stable since the 1970s. Since the 1990s under difficult conditions the car makers has adopted a new cost reduction program and their suppliers also have pursued cost reduction more and more. Although the wage differential of regular workers was stable in the 1990s, some suppliers have employed more irregular workers for labor cost reduction.