Two years after Japan mandated that companies disclose their gender pay gaps, progress toward equality remains slow, with the largest disparities seen at the highest-paying firms.
Of Japan’s top 100 companies by market cap, 70 had provided two years’ worth of data for analysis by Bloomberg as of August 15. Only one of these companies showed an improvement of more than 5 percentage points in its gender pay gap.
The government introduced this disclosure requirement in 2022 to promote female economic empowerment and encourage more women to join the workforce as Japan’s population declines. However, the data suggest that disclosure alone hasn’t been enough to shift the status quo, highlighting the need for additional measures to address the issue. On average, a full-time female employee in Japan earns about 21% less than her male counterpart, compared to a 14% gap in the UK and less than 6% in Denmark, according to 2022 OECD data.
At factory automation equipment maker Keyence Corp., female employees earned only 41.5% of what their male colleagues made as of March 2024, slightly worse than the previous year. This is despite Keyence’s reputation for high average salaries in Japan.
Traditional gender roles remain deeply ingrained, and the number of female managers has remained stubbornly low. Nearly 40 years after the enactment of a law requiring equal treatment of genders in employment, only 15.5% of board member positions are held by women, according to OECD data. This figure lags behind the UK at 40.9% and the US at 31.3%.
Youko Ootsu, a senior officer in the Labour Ministry’s Bureau for Equal Employment, noted that Japan’s gender pay gap could make the country less attractive to the foreign workers it needs.
Some Japanese companies have offered explanations for their persistent pay gaps. For example, factory automation equipment maker Fanuc Corp. attributed its gap to the fact that many female employees are contract workers and that the company has few senior female managers.
Yoko Yajima, a principal researcher specialising in diversity at Mitsubishi UFJ Research and Consulting, suggested that shorter working hours have likely contributed to the gender pay gap. Women, who often bear the majority of household and child-rearing responsibilities, may be forced to reduce their working hours, she said. Many firms have yet to establish fair methods for appraising those who work shorter hours and for assigning them meaningful tasks. Consequently, employees on shorter hours often receive easier, less impactful work.
Some companies have started to address these issues. Online marketplace operator Mercari Inc. discovered a 7% pay gap that couldn’t be explained by job level or seniority differences. Further analysis revealed that the gap was due to salary levels carried over from previous jobs. In response, the company made pay adjustments in August last year, reducing the gap to 2.5%. Mercari now avoids using salary history as a reference point when determining pay for new hires.
Household products maker Kao Corp. is also taking steps to address the issue, offering more flexibility for employees returning from parental leave early and introducing unconscious bias training this year.
On the government side, a cross-ministry project team is asking industries with significant pay gaps to submit improvement plans by the end of the year. Additionally, the number of companies required to disclose their gender pay gaps is set to increase.
Naoko Tochibayashi, Japan Communications Lead at the World Economic Forum, wrote in a report last year that while women’s labour participation rate has increased in Japan, more needs to be done.
“Bringing women into the labour market is not enough to solve the problem,” Tochibayashi said. “Proactive, conscious actions are needed to shift mindset and close the gender wage gap for good.”