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With a demographic crisis and investment flight from the US, Japan adopts equal pay as a strategy to face the lack of workers and modernize the market
Japan is facing one of the greatest challenges in its recent history. The labor shortage has been worsening over time, and low birth rate only complicates the situation. To maintain economic growth and avoid a productive collapse, the country is betting on a measure that has been rare until now: equal pay for men and women.
Unprecedented measure after two decades
Japanese companies have begun to review their pay policies. The goal is twofold. In addition to addressing labor shortages, the strategy seeks to enhance the strength of women in the market. The change represents a significant break with deep-rooted labor practices in the country.
The decision contrasts with the movement observed in the United States, where diversity and inclusion policies have lost ground. In Japan, the trend is the opposite. Salary parity was adopted to attract more women and offer real opportunities for career growth.
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Focus on ESG goals and exit from US investments
Another important factor is the focus on environmental, social and governance (ESG) criteria. With the changing political scenario in the US, companies and funds are redirecting investments to Japan.
To take advantage of this movement, Japanese financial institutions, such as Nippon Life Insurance and MUFG bank, are abandoning practices that cause pay inequality.
History of inequality in Japan
According to data from the Japanese Ministry of Health, Labor and Welfare, published by the Nippon.com portal, women still receive only 74,8% of men's salaries.
In regions such as Tochigi, this number drops to 71%. In OECD countries, the average female salary is 88,1% of that of men, according to a 2023 report.
The wage gap is a reflection of decades of unequal policies. Men benefited from lifetime employment, promotions based on length of service and job security.
Women, on the other hand, when they became mothers, were pushed into temporary or part-time positions, with no prospect of advancement. This pattern, known as the “L-curve”, symbolizes the sharp decline in women’s presence in the market after motherhood.
Labor shortage and uncertain future
Japan's demographic crisis demands urgent action. A study by Chuo University in Tokyo estimates that the country will have a shortage of 3,84 million workers by 2035. An aging population and falling birth rates are emptying the labor market.
In light of this, companies began to invest in the female workforce. Salary equality was accompanied by other actions, such as equal promotions and appreciation of professional experience. The idea is to make it easier for women to return to work, especially after maternity.
More than salary: flexibility and family support
But the data shows that equal pay is not enough. Companies are also offering practical support measures, such as reduced hours, shorter work weeks and the possibility of working from home. The aim is to enable women to care for their children without giving up their careers.
These initiatives are beginning to be implemented in large urban centers. In Tokyo, for example, several companies have adopted a four-day work week and reduced employee working hours. As wage equality advances, these measures are expected to spread to other regions.
Culture and transformation
Japanese culture still sees women as the primary caregivers of the family. Therefore, making the market more inclusive requires more than salary changes.
Companies are trying to balance tradition and modernization, offering new working conditions so that more women can contribute to the economy without sacrificing their personal lives.
This shift could represent a decisive step forward for Japan, which is seeking real solutions to the challenge of labor shortages. If successful, the new policy could influence other nations facing similar dilemmas.
With information from Xataka.
