Abenomics

Abenomics describes the plans of Japanese Prime Minister Shinzo Abe to revive growth in the world’s third largest economy, which is struggling to find traction under the impact of a strong yen and stubborn deflation. 

BusinessGlobal Economy
JAPAN

Sexism stops 'Abenomics' having a meaningful effect on Japanese growth

Tokyo's leaders fail to realise that a lack of working women is an impediment to growth

PUBLISHED : Tuesday, 28 May, 2013, 12:00am
UPDATED : Tuesday, 28 May, 2013, 3:14am
 

No one needs a lean-in movement like Japan's women.

I had this conversation in Tokyo 12 years ago with Sheryl Sandberg, long before she joined Facebook and wrote her book on female empowerment. We were listening to her boss at the time, US Treasury Secretary Lawrence Summers, speak about the need for structural reforms to the Japanese economy, in a giant auditorium devoid of women. It was one of several male-dominated events that day. The author of Lean In leaned over and asked me half-seriously: "There ARE women in this country, right?"

A dozen years on, Japan's leaders appear to have realised that the two problems are intertwined: the lack of women in the workforce poses one of the biggest structural impediments to faster growth. Japan's institutionalised sexism deepens deflation and hurts competitiveness, and exacerbates the demographic trends that make Japan's debt load so dangerous.

Prime Minister Shinzo Abe claims that tapping the other half of Japan's 126 million people is a key element of his revival plan, dubbed "Abenomics". Yet his proposals are timid and may even make it harder for Japanese women to enter the working world. As with other vital structural changes required to restore Japan to health, Abe needs to act more boldly.

The World Economic Forum ranks Japan a dismal 101st in gender equality out 135 countries, behind Azerbaijan, Indonesia and China. Not a single Nikkei 225 company is run by a woman. Female participation in politics is negligible, and the male-female wage gap is double the average in Organisation for Economic Co-operation and Development countries.

One number explains why Japan must pull women into the job market and help them achieve leadership roles: 15 per cent. That's how much of a boost that gross domestic product would receive if female employment matched men's (about 80 per cent), says Kathy Matsui of Goldman Sachs Group.

"Japan is lagging because it's running a marathon with one leg," says Matsui, who has been churning out "Womenomics" reports regularly since 1999. "It must start tapping its most underutilised resource."

Abe is acting from fiscal necessity, not from a sense of social justice. Japan's workforce is shrinking as the population ages and the birthrate declines. That might be manageable if not for a public debt more than twice the size of the US$5.9 trillion economy. Politically, increasing the number of women workers is an easier sell than opening up Japan to immigrant labour.

Yet even so, Abe's proposals hardly match his rhetoric. He has talked about extending childcare leave, expanding day-care facilities and asking companies to hire female board members. He's merely scratching the surface and reinforcing stereotypes.

The government is considering circulating "Women's Notebooks" to warn of the evils of postponing marriage and motherhood. Yes, career-oriented women are selfish. When Abe calls on companies to provide three years of maternity leave, he uses a Japanese expression that a child should be held by its mother until the age of three. In other words, kids are women's work. (In fact, knowing that a three-year absence could derail their careers, many women are likely to further delay childbirth.)

Abe's government should begin by actually enforcing the 1986 Equal Employment Opportunity Law. Japan should promote diversity and offer tax incentives to companies that do, as well. More-flexible work hours would draw women into the workforce. So would offering subsidised or free day care.

Abe should consider quotas for female executives. A 2012 McKinsey & Co report titled "Women Matter" bemoaned the low percentage of female Japanese managers and found companies that champion diversity are more profitable and innovative. Women are good for business and yet only 30 companies on the Nikkei 225, and 130 out of the 1,600-plus companies listed on the Tokyo Stock Price Index, have a female board member. Those numbers won't improve on their own.

These aren't the only difficult structural fixes Abe is avoiding. Is he lifting barriers to immigration? Tightening corporate governance? Tweaking taxes to support startup companies? Nope.

It's time for a national dialogue and decisive action. Women should take a page from Sandberg and demand equality. Japanese men must lean in, too. In a top-down society, the push needs to come from political and business leaders.

Bloomberg

 

Tom Holland is on holiday

Share

 

Send to a friend

To forward this article using your default email client (e.g. Outlook), click here.

Enter multiple addresses separated by commas(,)

Related topics

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive