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CNBC

Abe's 'womenomics' report card: Tries hard but could improve

Japan's female labour participation reaches a record high, but working mothers say change will be difficult unless women are placed in a position of leadership

PUBLISHED : Thursday, 04 August, 2016, 8:41am
UPDATED : Thursday, 04 August, 2016, 12:02pm

Saori Osu is the epitome of what Japanese Prime Minister Shinzo Abe 's "womenomics" policy hopes to cultivate; she combines being the CEO of a consulting firm with being a mother of three.

Her life is a stark contrast to the usual practice of Japanese women, she tells CNBC, because 60 per cent quit their job after having their first child.

In many cases, for good reason.

A severe shortage of daycare places has long meant that many women were unable to return to work, and those that did found it impossible to continue due to inflexible company working hours.

As a result, Japan has languished in the bottom third of the World Economic Forum's Global Gender Gap Index, which since 2006 has measured gender equality in the workforce.

In 2014, Goldman Sachs calculated that Japan's gross domestic product (GDP) could be boosted by almost 13 per cent if the gender employment gap was closed.

It was one of many warnings on the issue, and they were heeded by Abe, who that year told the WEF, "The female labour force in Japan is the most under-utilised resource. Japan must become a place where women shine."

Since then, Abe's government has pushed its "womenomics" program on a number of fronts, including through policies to improve parental and childcare benefits for working mothers, and by pressuring companies to disclose gender diversity targets.

"Surprisingly, Japanese childcare leave benefits now rank among the most generous in the developed world," Goldman said in a recent report. The report noted that a new law, called the Female Employment Promotion Legislation, called on companies to disclose targets and proposals on how they planned to increase the number female managers in their organizations.

Goldman found that Japan's female labour participation for part and full-time work had risen to a record high of 66 per cent in February, a five percent increase from 2013. Citing OECD statistics, Goldman noted that Japanese female workforce participation had even surpassed that of the US at 64 percent.

"Womenomics" could get a further boost from Abe's most recent fiscal stimulus.

On Tuesday, Japan's cabinet approved a 28 trillion yen (US$280 billion at the August 4 exchange rate) stimulus package, which included cash payments to those with lower income, adding more workers to pension programs, college scholarships and fresh infrastructure projects. The package reportedly includes the creation of more childcare facilities as well as money for companies to help them offer longer maternity leave.

Osu, who is also the president of the Working Mothers Association of Japan, says she can see some recent improvement.

"Companies are starting to create a welcoming environment for women who want to return to the workforce," she says. "As a result, there is now an increasing number of role models for women."

All is not rosy yet, however.

Japan's labour shortage has accounted for some of the rise in female employment, with many companies resorting to female labour as a final option. And although female workforce participation may be increasing, men still dominate the top positions of companies.

"I think (change) will be very difficult unless women are placed in a position of leadership. They are still minorities," Osu says.

Osu explains that women are hesitant to become leaders or managers in Japan's patriarchal society.

"They need to overcome that, and instill an environment where it's natural for women to be leaders," she says. "Without that, it's hard to say we achieved success."

Despite the positive changes, Japan's position on the WEF's gender gap index was still a relatively low 101 out of 145 countries in 2015, with a score equal to that of Swaziland.

The same 2015 WEF report found that, on average, women spent 299 minutes per day on unpaid work, compared to 62 minutes for men, and the share of women on boards of listed companies sat at just  four per cent.

Yasayuki Nambu, the CEO of Pasona, a leading Japanese recruitment group, said that changing the male mindset was vital to more substantial improvements.

"The first step in changing that is for men to accept the power which woman have," he said.

There also appears to be work to do on some of the legislation around "womenomics."

Goldman Sachs points out that under the new Female Employment Promotion Legislation, there is no penalty for companies who do not comply with the quotas on female managers. Furthermore, by targeting only large companies with more than 300 people, the legislation left Japan's small and medium-sized companies untouched.

Despite the weaknesses of "womenomics," however, recruitment boss Nambu is hopeful. He recalls the many rejections he received early in his career when he put forward female candidates for roles.

"The fact that the country has adopted this message and made it lawful is significant progress," he said.

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