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Japan gov't may require companies to release gender wage gap as early as 2023

The prime minister's office is seen in Tokyo's Chiyoda Ward, on Dec. 7, 2021. (Mainichi/Kan Takeuchi)

TOKYO -- The Japanese government has begun considering requiring companies to disclose wage levels by gender in order to "visualize" the wage gap between men and women. The move is expected to be implemented as early as next year to encourage companies to make efforts to correct the disparity.

    The government plans to require information to be disclosed in accordance with the Act on the Promotion of Female Participation and Career Advancement in the Workplace, as well as in annual securities reports.

    According to the 2020 Basic Survey on Wage Structure, women working full-time earn a scheduled monthly salary of 250,000 yen (about $2,070), just over 70% of men's 340,000 yen (about $2,810). The wage gap is particularly significant for those aged 55 to 59, with women earning 270,000 yen (about 2,230) per month compared to men's 420,000 yen (about 3,470). A Ministry of Health, Labor, and Welfare official analyzes that the reasons for the wage gap are that "there are fewer women in management positions and that they have been with the company for shorter periods of time than men."

    Japan is considered to have a relatively large wage gap between men and women. According to a 2021 survey by the Organisation for Economic Co-operation and Development, the income gap between men and women in the U.S. and Europe is in the 10% range, but in Japan it is 22.5%. Japan ranks third worst among the 38 member countries, behind South Korea at 31.5% and Israel at 22.7%.

    By having companies disclose information on wage disparities, the government aims to raise awareness among businesses and accelerate efforts to correct the disparities. Under the female participation promotion law, depending on its size, companies are required to select and disclose one or two indicators -- including the ratio of female employees hired, the percentage of male and female employees taking child care leave, and gender differences in length of service -- so that job seekers can use them as a reference in selecting a firm.

    The labor ministry is mulling amending the ministerial ordinance to expand this system and require the publication of wage levels by gender, starting with large companies. The scope of the publication, including employment status and age, will be determined later with the relevant bodies.

    In addition, until the fiscal year ended March 1999, annual securities reports were required to list by gender the number of employees, average years of service, average age and average salary, but the gender breakdown was removed in consideration of the burden on the companies. The Financial Services Agency is now considering bringing back the entry of average salaries by gender.

    Professor Mari Miura of Sophia University, an expert on gender disparity, said, "Gender discrimination shows up in wage disparity, so it is very significant that the pay gap between men and women is made public. If investors and students start selecting companies based on this information, firms will be more likely to focus on career development for women. However, I am concerned that if only full-time employees' wages are made public, non-regular employees will be left out."

    (Japanese original by Natsuko Ishida, Lifestyle and Medical News Department)

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