The Journal The Authority on Global Business in Japan

Increasing opportunities for women in the workforce is a key part of the efforts of Japanese Prime Minister Shinzo Abe to boost the economy. On July 13, at The Place of Tokyo, Littler Mendelson P.C. shareholder Trent Sutton and special counsel Aki Tanaka spoke to members of the American Chamber of Commerce in Japan about the current state of women, work, and wages.

Globally, women’s participation in the workforce decreased from 52.4 percent to 49.6 percent between 1995 and 2015, but that number doesn’t tell the whole story, Sutton said.

“Even though we’ve seen a decrease in workforce participation, we’ve seen an increase in female executives. Twenty years ago, none of the S&P organizations had a female executive. Now we’ve seen that number increase. It’s 5.2 percent, but when you consider that it was zero before, that’s good progress.”

Participation at the board level is gro­wing at a faster rate, he added. Some 1,100—or 20.2 percent—of chairs are now filled by women on the boards of directors of Fortune 500 companies in the United States. In Japan, however, a mere 0.8 percent of such members are women.

To climb to the top levels of mana­ge­­ment, women must first have an environ­ment that allows work–life balance. Childbirth often pulls Japanese women away from the workforce, and while leave and benefits do exist, they lag other nations. Countries such as the United Kingdom offer generous leave before and after birth, and US labor laws provide for more as well. The situation is improving for Japanese mothers, however.

Regardless of gender, excessive time spent in the office is an issue that has been in the spotlight in Japan in recent years. A revision of the country’s labor laws was passed in June, and one of the biggest things lawmakers hope to accomplish is to reduce working hours and limit overtime, said Tanaka, who is a former vice-chair of the ACCJ–Kansai Women in Business Committee.

The revised law stipulates that overtime should be less than 45 hours per month and 350 hours per year, but does provide flexibility for employers. Under special circumstances, overtime can be extended up to 100 hours per month and 720 hours per year—but this should occur fewer than six months a year.

“Another component of the new legis­lation is that it is going to increase the overtime premium for small and mid-sized employers,” Tanaka added. Right now, companies with less than ¥50 million in capital or fewer than 100 employees are exempt from the rules concerning premium rates when overtime hours exceed 60 per month. But that exemption will be abolished on April 1, 2023.

While women around the world continue to earn less than men for the same work, the situation in Japan is significantly worse. Among members of the Organisation for Economic Co-operation and Deve­lopment, wage disparity is lowest in Australia at 15.4 percent and is 18.1 percent in the United States. In Japan, however, the gap widens drastically to 25.9 percent.

One reason for the jump is that 40 percent of Japan’s workforce is made up of “irregular” em­plo­yees, those on short-term contracts that often include limited or no benefits, and 70 percent of these workers are women.

Revisions to the law explicitly prohibit the unfair difference in employment conditions and benefits—including base salary and bonuses—for limited-term employees.

“Pay equity around the globe has really gotten a lot more attention,” Sutton said. “The evidence really does show that the more women working in the economy the greater the GDP and the greater the growth of the country. And if we can treat women the same way, that has an even bigger impact.”

Pressuring companies to change through legal channels, an effective means in other countries, may not work in Japan, Tanaka feels. “I can easily ima­gine the situation in which a woman brings a lawsuit over pay and then everyone in Japan criticizes her, saying, ‘You just want to have your own profit.’ That’s not something women are allowed to do in Japan.”

So it’s up to the government through revised laws, and companies through ongoing initiatives, to improve the landscape for women in business. Pro­gress is being made, even if the pace is slower than would be desired.

Christopher Bryan Jones is Editor-in-Chief of The ACCJ Journal. Originally from Birmingham, Alabama, he has lived in Japan since 1997.