Tapping Potential: Encouraging Women’s Empowerment in the U.S. & Japan

The Japan Society, N.Y.
April 2, 2014
Yoriko Kawaguchi
Professor, Meiji University

These days, scarcely a day passes without some articles on gender issues appearing in major newspapers. I’ll give you some examples.

―Daiichi Life Insurance, which intends to promote about 200 people to managerial positions, has decided to make about 30% of them women. With this move, the company’s number of female managers will grow to 700 or about 18% of all managerial positions.

―Keidanren, The Japan Economic Federation, has decided to ask member companies to develop voluntary programs for the promotion of women to managerial positions. The voluntary targets will be made public and checked against actual performance.

― In Japan, there is a now an Internet home page that gives transparency to which companies are more gender sensitive by making public individual company names and giving specific numbers. Amazingly enough, this site is run by the government.

These are all in response to Prime Minister Abe’s goal that 30% or more of Japanese companies’ and other institutions’ managerial positions be held by women by 2030. Last April, he made a personal pilgrimage to Keidanren to request that at least one board member should be a woman.

Prime Minister Abe’s Japan Revitalization Plan, subtitled “Japan is back”, states:

“The government will intensively maximize high potentiality within women so as for women to take an active role by decreasing the number of women who leave work due to childbirth/child rearing and by increasing the percentage of women in leadership position as a core of the growth strategy.”

I applaud this policy, and as I see it, there are three critical components driving Abe’s proposals. The first is Japan’s declining birth rate and projected resulting reductions in its future labor force. The most recent long term estimates by the government shows that if current labor participation rates of women and seniors do not increase, Japan’s work force will decline by 42% in 2060. If we succeed in bringing the female labor participation rate of those between ages 30 to 49 to as high as Sweden’s, the highest among developed countries, and if we retain seniors in labor force until age 65, the Japanese labor force will still decline by 27% in 2060. Of course a declining labor force means a lower economic growth rate. Therefore, we definitely need more women and seniors to work.

The second critical component is to introduce more diversity into Japanese society. Japan is a relatively homogeneous society. A heterogeneous element can stimulate and stir a society which would contribute to faster changes and more progress. In the case of Japan, diversity comes from women and foreigners. This is what Japan needs to survive and grow in this era of globalization and speedy information dissemination.

The third critical component driving Abe’s new policy is Japan’s evolving notions of gender equality and human rights. Given the first world’s continuing evolution on gender issues and Japan’s current challenges, it is no longer morally possible to ignore the valuable contribution Japanese women can make to the advancement of Japanese society. Especially in light of gender developments elsewhere in the industrialized world, Japan can no longer afford to do without the contributions of Japanese women towards making Japan a more just society. As importantly, there is a growing desire by Japanese women to contribute more to their society and to achieve their fullest potential as individuals.

It seems Prime Minister Abe’s policy has started to work. A very important article appeared in the March 29th Nikkei edition. In 2013, the percentage of the labor force participation rate (defined as working or seeking work) in all age groups of 15 and above has increased for the first time in 16 years to 59.3%. The female component of the labor force increased by 1.4% to 2.8 million.

Why has the historic labor participation rate of Japanese women been so low? Why have there been so few Japanese women in management positions?

I am here not as a specialist on this issue but as a practitioner or survivor of the “game”. If you ask me the question whether or not in my career I felt I hit a “glass ceiling”, my answer would be “no”. The reason is that I was protected by Japan’s employment practices known as the “seniority system” and “lifetime employment.” While there have been many workplaces which left women outside these practices, I was in the government, and at least, the government was faithful to these practices.

These practices mean that as long as one stays in an organization, one gets promoted at more or less the same speed with the people who worked the same length of time. I didn’t quit and got promoted with my male colleagues who started working in the same year.

The seniority system and the lifetime employment system are two-edged swords. Suppose you leave the workplace at the age of 30 (and in Japan, about 60% of women leave their workplace in their thirties,) to spend some years taking care of your children at home, and later try to go back to work. In the first place, it is difficult to get into a workplace in middle age, and second, even if you succeed in finding a job, you are apt to lose most of your past working years, and therefore, your earnings are smaller and your promotions delayed. This is, in my view, one of the major reasons for the small percentage of Japanese women in managerial positions, and the cause of lower earnings for women. Of course, the most fundamental cause for lower earnings of women is the differential wage structure that still exists in Japan despite it’s being illegal. As recently as 2012, women were paid 70% of what men received for the same work.

Leaving the workplace to raise a family is the cause of what we call the “M-curve” problem. Prime Minister Abe’s target is to raise the employment rate of females in the age group 25 to 44 to 73% or 5 points higher than the 2012 level.

Now, for that to happen, we will need effective policy changes that will result in more daycare center facilities, facilities for school children to stay until one of the parents comes home, assistance to women seeking to go back to work, assistance for women to start new businesses, and a better work-life balance for both men and women. There are new programs to address these needs. For example, one new program we have is to create daycare facilities for 400 thousand children in 5 years so that there will be no waiting line for daycare centers.

To achieve this daycare center program alone requires that the government will have to reform many regulations that exist in Japan with the understanding and agreement of interest groups concerned. The Prime Minister is often asked in the Diet whether this overall gender goal can be achieved. His answer is always that this is not “whether we could or not. It is imperative that we do this.” I think he is right.