A work in progress.

Photographer: Tomohiro Ohsumi/Bloomberg

Japan Needs Workers. Women Are Ready.

Noah Smith is a Bloomberg View columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
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When Japanese Prime Minister Shinzo Abe declared that he intended to promote women in the workplace, many people were understandably skeptical. After all, Abe is known as a conservative, and conservatives in most countries support traditional gender roles. Perhaps for this reason, many writers rushed to declare that "womenomics" wasn't for real. But I believed that something big had changed in the Japanese mindset, and that this time really was different. I came away from a recent trip to Japan even more convinced that womenomics is a deep and permanent shift that will reverberate throughout the country's social and economic structure. 

The first reason for my increased confidence is that I now understand the strongest force behind the push to hire women. It's not Abe -- it's demography. The rapid decline of Japan's working-age population -- down more than 11 percent from its mid-1990s peak, and still falling -- has made companies desperate for talent. That means hiring either foreigners or women. Women, having no language barrier, requiring no visa sponsorship and being already well-acquainted with Japanese corporate culture, are the natural first choice. For many Japanese companies, therefore, hiring women isn't an act of social responsibility, gender fairness or capitulation to the government -- it is a simple act of survival. 

This makes Japan's gender revolution different from those of the U.S. and Europe, which put women to work back when the population was young and growing. In the U.S., increasing pressure for corporate profitability, resulting from globalization and the shareholder revolution, forced companies to hire the best available talent at the lowest available price -- in many cases, that meant hiring women. In Europe, progressive governments added their weight to those natural economic forces. But in Japan, the economic pressure comes from demography rather than profitability, and the government is worried about the Chinese threat rather than social equality. 

It doesn't matter. No matter what Japan's reason is for putting women to work, the result will be similar to what was achieved elsewhere. 

The second reason I'm confident about womenomics is a new government policy. Womenomics 1.0 involved rhetoric and provision of publicly funded daycare. That was a good start, but now the government is pulling out the really big guns. Starting in April 2016, large Japanese companies will be required to report their percentages of female hires and female managers, along with targets for these percentages. 

This policy will be effective -- not just because Japanese companies try to avoid public shame, but because the new numbers will allow a huge raft of behind-the-scenes measures to push companies toward gender equality. A manager at a large Japanese construction company told me that local governments are already awarding contracts preferentially to companies that score well on the government's measures. 

The public display of the new numbers will make this even easier to do. In addition to public contracts, the Japanese government is involved with companies in a host of ways, from regulation to bailouts. This extensive network of relationships is the steel fist inside the velvet glove of Abe's soaring rhetoric.
QuickTake Abenomics 

Japanese companies that don't make substantive, quantitative, public moves toward gender equality may soon be reminded where the term "Japan Inc." comes from. They may find themselves allowed to fail when they would otherwise be bailed out. They may find themselves losing out to competitors for government contracts. They mind find themselves suddenly deprived of regulatory protection from foreign competitors, or legal protection from hostile takeovers. 

None of these measures would be official, announced or systematic. But the threat is enough. For companies that are resisting the demographic pressure to hire and promote more women, the Japanese government and its industrial policy may provide a helping shove. 

Combined, the power of demography and government pressure will probably be too much for most Japanese companies to stand against. Even that country's notoriously hidebound and traditionalist companies value their survival over their prejudices. The days of the Japanese company as a boy's club are numbered.

 Of course, major challenges remain. The difficulty of firing employees and the still-entrenched seniority system prevent women from moving quickly up the corporate ladder. This is why the dramatic rise in Japan's female labor participation rate hasn't been matched by an equally quick rise in the number of woman managers. 

In addition, many Japanese companies are still relatively unpleasant places for women. Japan's management practices discourage work-life balance, forcing employees to stay too long in the office and preventing them from going home to their children. And harassment of working mothers is still widespread (which also can't be helping the nation's low fertility rate). 

But as more women enter the workplace, these negative cultural practices will change, and the number of women in top positions will gradually rise. Japan is experiencing a peculiarly Japanese type of gender revolution, but the revolution is real.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Noah Smith at nsmith150@bloomberg.net

To contact the editor responsible for this story:
James Greiff at jgreiff@bloomberg.net