Japan’s womenomics resists the sceptics

For those who have already decided that Japan’s “womenomics” movement is an empty promise, the Kanagawa Women’s Empowerment Support Group has plenty of ammunition.

Its pink-toned website introduces a panel of movers and shakers aiming to promote female empowerment in Kanagawa prefecture in the coming year: 11 high-profile corporate leaders — and all 11 of them men.

The all-male cast, pictured below the slogan “Women, increasingly taking on leadership roles”, fits with a theory that prime minister Shinzo Abe’s campaign to redress Japan’s ingrained gender inequality is stalled, disingenuous or was doomed from the start by a culture not yet ready to embrace that change.

Problems with this Japanese initiative are not hard to spot. On Mr Abe’s watch, Japan has dropped to 111th place in the World Economic Forum’s national rankings of gender equality, with 10 of those places shed between 2015 and 2016. In its first year, a scheme offering cash to small companies promoting women to executive roles had just one application.

An early target, which predates Mr Abe’s administration but which he revived in 2013, was for women to occupy 30 per cent of all management positions by 2020. Not long after, and to avoid a humiliating miss, Mr Abe downgraded public- and private-sector targets to between 7 per cent and 15 per cent, while moving the deadline to 2021.

But while no one is playing down the setbacks, a number of Japan’s most accomplished female executives from across the business world strongly oppose any attempt to declare the project a failure. In a number of key areas, they say, the picture is significantly more encouraging than five years ago and gender equality measures stand an inc­reasingly good chance of being implemented via a broader assault on traditional working patterns.

For example, Mr Abe’s administration put efforts to encourage women into the workplace at the centre of Japan’s 2017 budget. The key measure — a reform of the system of dependent-spouse tax deduction — has long been pinpointed as a necessity for deeper progress. For years, Japanese families have been able to receive a generous tax deduction if the dependent spouse (the wife, in the overwhelming number of cases) earns less than ¥1.03m ($8,930) a year. In response, many women lowered their working ambitions, taking low-earning, part-time jobs. From this year, the limit will be raised to ¥1.5m a year.

There are those, including Kathy Matsui, Goldman Sachs chief Japan strategist, who say the change is not enough to affect a big enough number of families. “It was helpful, but not sufficient,” says Ms Matsui, who likens progress on womenomics to Japan’s slow but steady progress on corporate governance.

Also, she adds, the pace is set to speed up. Japan’s shrinking labour force, which has seen the graduate job-to-applicant ratio hit a 26-year high of 1.43, implies that in the very near future companies will compete to attract and promote women to top positions.

“Gender equality is very contrary to the Japanese way of doing things but the maths does not add up on human capital. The jobs market is already tight and has become over-tight,” says Ms Matsui.

“The rate of female participation in the labour force at 66 per cent is high and much higher than the 50 per cent it used to be, but we know that these are part-time jobs that do not give women a role in decision making and leadership,” she says. “But those sort of jobs don’t pop out of nowhere . . .  You need to build a pipeline.” She points out that, despite mockery of campaigns such as the Kanagawa Women's Empowerment Support Group, backing from male business leaders is critical.

Machiko Osawa, an expert on labour economics at Japan Women’s University, says there has been a substantial shift in attitudes: “In older companies where the average age of the employees is [higher], there is less desire to change but newer companies that want to expand globally are a very different situation,” says Prof Osawa.

But she also stresses that the tight labour market alone is not enough to force companies to loosen the many forms of indirect discrimination that have defined Japan’s male-dominated executive workforce.

Gender equality will come, she says, only when Japan develops a more liquid job market that would allow women to threaten to take their skills to other organisations.

Broader changes in Japanese attitudes to work — particularly the growing distaste for punishingly long hours — chime directly with gender equality proponents’ demands for companies to find new ways of assessing employees’ work.

There is a momentum behind wider changes, says Miyuki Kashima, of BNY Mellon Asset Management Japan. “The macho thing in work culture is under pressure. It used to be cool to work to midnight, now it is very uncool. If you cap overtime hours, it makes more jobs available to women,” she says.

The change to the tax law, she adds, may be the least important of changes under way in womenomics. She points out that 98 per cent of companies with at least 301 employees had complied with a law ordering them to produce a plan on how to promote women, despite the lack of penalties for failing to do so.