Sunday, December 21, 2014

Roger Agustin

Musings of A Sarariman

Nov - Dec 2014

I thought I knew more than a bit about “Abenomics” until I heard the word “Womenomics.” 

As part of the govern- ment’s long term strategy for growth which is the so called third arrow of Abenomics, to enhance productivity and to retool Japan’s economic structure, women should be given much greater opportunities. This is where “womenomics” come into play (the term originally coined by Kathy Matsui in 1999 as managing director of Goldman Sachs Japan) and has become a keyword in Abe’s economic plan. Abe has stressed in his speeches that under his administration, women’s active participation constitutes the core of the growth strategy, rather than just a social policy. The 1999 report on Womenomics concluded that an increased proportion of Japanese women were actively participating in the workforce and becoming a very important source of income and consumption growth. Contrary to conventional wisdom that the shrinking population has a negative impact to economic growth, the report stressed that Japan has to make better use of its most underutilized resource – its women. It goes on to say that the theory of low birth rate and remaining single attributed to higher participation of women in the workforce is actually contradicting with data gathered in different economies with high labor participation rates. That is, higher labor participation positively correlates with higher birth rate! I am guessing that PM Abe read through the report well enough and was convinced enough that he wrote womenomics “offers a solution with its core tenet that a country that hires and promotes more women grows economically, and no less important, demographically as well.”

Of course, the report did not say that pursuing womenomics is the only solution but requires more changes in many policies both in the public and private sectors to eliminate obstacles for higher women participation, given that Japan remains a deeply conservative society when it comes to the role of women in the workforce. Some examples of the main reasons behind Japanese women’s low participation rate in the labor force are insufficient child care and nursing support, tax obstacles that limit the income to be eligible as dependents, inadequate focus on diversity and work life balance in private and public sectors, and rigid immigration laws that restricts hiring of foreign workers to resolve insufficient daycare, nursing and housekeeping services for working women. In fact, Abe pushed the policy further by giving a clear target of having working women hold 30% of the senior management position by 2020 (in time for the Tokyo Olympics). He has called on the Japan Business Federation, also known as Keidanren, and the two other major business organizations, to set their own targets for promoting women to senior positions and work out the implementation plans, and that the proportion of women executives should be reported in the companies’ securities filings. This gave companies’ leaders headache because 30% is a huge leap from the current 10%, or a drastic change from his direction last year to have at least one female board member for each company. I wouldn’t disagree. Where on earth would you get the 30% in the next 6 years? Whether it is possible or not, it is not bad though to raise the bar as a target. I am hoping that it would trigger faster but effective policy changes in pursuing or even achieving the goals of the Equal Employment Opportunity Law which took effect way back in 1986.

Lastly, I am still thinking how “womenomics” would be accepted by a sarariman…a threat maybe. For me, I am for it. After all, at work, it’s the results that count. See you all next year!

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