“It’s just not worth investing in women”:How Japan won’t let its Women save the Economy by Lea Wowra

The new Japanese administration has a lot on its plate, to say the least: two lost decades, failed stimulus plans, demographic hurdles, national debt, and a rank of 121 out of 153 in the World Economic Forum’s Global Gender Gap Report of 2020. Facing a host of problems, Japan is not taking advantage of – and in fact actively impeding – a large and vital part of its workforce: Japanese women.

After the resignation of Prime Minister Shinzo Abe, Japan should take stock of the so-called “Abenomics” that marked the country’s economic policies since his second inauguration in 2012. His administration has pursued extremely lax monetary policies to pull the country out of many years of deflationary slump – and that while Japan already stood out as being the industrial nation encumbered with debts. Meanwhile, Japan owes more than twice as much as it produces annually with its biggest lender being its national bank.

The global pandemic certainly has not helped the economic situation. However, lacking economic revival is also owed due to the administration’s procrastination of structural reforms. Although many companies brought guaranteed lifetime employment to a halt, its impact remains. Many workers with outdated skills benefit from the system. What adds to these burdens on corporate competitiveness and profitability is Japan’s harsh immigration policies and its ageing population that decelerates demand.

Enter Japanese women: Japan ranks terribly in measures of female economic opportunity and political empowerment. While Abe’s administration set out to increase the number of women in executive positions by 30 %, the parity goal remained out of reach by far. This certainly is due to various discriminatory hurdles that Japanese women face in the world of work and beyond. Women generally seem to be regarded as second-class labour. According to the Organisation for Economic Co-operation and Development (OECD), women in Japan earn 27 % less than their male counterparts. Besides, the transition from full-time to part-time jobs and vice versa is nearly impossible – this keeps the pool of female candidates extremely small for management positions.

Yet, it is not just the world of work that seems to be against women. The traditional role of mothers is being held up while Kindergarten places are minimal, and working overtime remains the norm. Many women have no choice but to quit their job when having their first child. Thus, it is not worth investing in women seems to be a conventional justification for keeping women far from entering management positions – maybe even far from entering universities. In 2018, the Tokyo Medical University was accused of manipulating female applicants' test scores to keep their intake of female students under 30 %. School administrators justified the rigging of admissions by the likelihood of women to drop out of the profession. Among OECD countries, Japan lists as having the lowest number of women holding a PhD.

There has been a rise in Japanese working women during Abe’s administration as his so-called “Womenomics”-policies. However, 73 % of 850.000 women that took up work in 2018 worked either part-time, short-term or both. It is no surprise then that GDP growth did not follow. On the contrary, it most likely fostered deflation in lowering wages. The Japanese taxing system then further widens the gender gap through tax disincentives. A husband receives tax abatements if the income of his working wife remains below a certain threshold.

All this despite Japan’s chance to boost GDP growth by no less than 15 % according to a Goldman Sachs report – if it was for more flexible labour contracts, tax reforms, gender pay gap disclosures and promotion of female entrepreneurship. And though we should not be expecting major policy changes from Yoshihide Suga’s new administration, he will need to take a more effective stance on women empowerment in various realms (and one should not forget about the chances that looser immigration rules could entail). Otherwise, the pile of deeply rooted issues on the Japanese plate is certainly not going to shrink. In the end, it really is worth investing in women. However, the right policies will surely need to precede the erosion of discriminatory behaviour and attitude against women that pursue their dreams and – along the way – save the economy.