Japan’s ‘Womenomics’ Needs Reboot To Boost GDP By 15%

As Japan mulls how to reinvigorate its economy in the post-Shinzo Abe era, there’s an obvious place to start: gender.

The tragic July 8 assassination of the former prime minister, the longest-serving leader in Japanese history, has been almost reflexively fawning. Fair enough. Yet in days since, new data remind us of the danger of reframing Abenomics as a successful effort to raise Japan’s economic game.

In 2012, Abe took power for a second time. Chastened by how ignominiously the earlier 2006-2007 stint went, Abe returned with James Carville’s “it’s the economy, stupid” mantra from the 1990s running through his head. Arguably no economic priority won Abe greater attention than his pledge to make the female half of Japan’s 126 million people “shine.”

Tokyo’s “womenomics” effort ended up rather dull, instead. On Wednesday, the World Economic Forum ranked Japan 116^th in its gender equality index, behind Burkina Faso, Tajikistan and Guatemala (it was 101^st in 2012). And most importantly, 14 rungs behind China, 17 behind South Korea and 67 behind Singapore.

Japan does even worse when it comes to gender parity in politics, ranking 139^th out of 146 countries. This puts Japan behind Bahrain, Jordan and even Saudi Arabia.

There is, admittedly, some potentially good news to report. In Sunday’s upper house parliamentary election, women grabbed a record 35 of 125 seats, or 28%. The bad news: past milestones of this sort proved to be false dawns as the patriarchy expanded its power.

This presents current Prime Minister Fumio Kishida with a unique opportunity to succeed where past governments—two of them run by Abe, the most recent from 2012 to 2020—failed. As Kishida decides where to take post-Abe Japan, no economic fruit hangs lower than finally taking steps to better utilize half of the labor market.

All available research—from WEF to the International Monetary Fund to Goldman Sachs—confirms that countries and companies that best harness female talent as the most innovative, productive and inclusive. And yet none of Japan’s leaders so far this millennium has bothered to empower women. Not successfully, at least.

Many talked a big game of doing so. Junichiro Koizumi, Japan’s 2001-2006 prime minister and Abe’s mentor, made headlines briefly by luring more female candidates to run for office for his Liberal Democratic Party. Leaders since then have turned up at any gender-empowerment conference they can. But few policy changes of note hit the parliament floor.

One metric that Tokyo claims as a victory: labor participation rates have been increasing since at least 2010. It’s now a record at just over 71%. That’s a good thing, of course. But in aging and immigration-wary Japan, all too many women entering the labor force are routed into “non-regular” jobs. These are essentially hourly pay gigs that lack the benefits, bonuses or the basic security of full-time employment.

This gender dynamic has grown even worse in the Covid-19 era. As a result, says professor Maruyama Satomi at Kyoto University, the pandemic is accelerating the “changing face of female poverty” in a nation that long prided itself on being as egalitarian as they come.

It’s troubling, though, that a decade since Abe unveiled his womenomics scheme Japan still doesn’t know what it doesn’t know about gender disparities. In May, Kishida announced Japan might soon require companies to share data on wage gaps between female and male staff. If only the ruling LDP had done so 10 or 20 years earlier.

Kishida should demand such reporting immediately. He should announce tax incentives for companies to increase ratios of female executives, managers and full-time staff. He also should lead by example and increase the number of female cabinet members—there are only three out of 20.

Equally important, Kishida should entrust some of the key ministries to women, not just the secondary ones few want to helm. A female minister of foreign affairs or finance or a female chief cabinet secretary could go a long way to proving Kishida’s commitment to gender equality.

Kishida could sell the issue less in terms of social justice than economic revival. No serious economist would applaud the widening disconnect between Tokyo’s crushing debt load, its fast-aging population and declining birthrate. Since the late 1990s, former Goldman Sachs strategist Kathy Matsui has argued that gross domestic product would get a 15% boost if Japan closed the gap between female and male labor participation rates.

This research matters because the work of Matsui and her team won over Abe a decade back. Sadly, though, Japan spent the last 10 years talking about increasing gender parity, not acting.

It now falls to Kishida to reengineer an economy losing competitiveness to China and producing fewer tech “unicorns” than Indonesia. Giving fully half the population greater scope to produce a more entrepreneurial and vibrant Japan is certainly the first place I’d look.