Use information disclosure as leverage to correct disparities

In recent years, the promotion of women’s empowerment has become a pillar of national labor policy. It is crucial for this pillar not to end up simply as an empty slogan.

The government has decided to make it mandatory for companies to disclose wage differences between their male and female employees. This rule has been included in the Basic Policy on Economic and Fiscal Management and Reform, and the government aims to put it into effect this summer after revising related ministerial ordinances.

About 18,000 companies nationwide with 301 or more employees are expected to be subject to the requirement. The Health, Labor and Welfare Ministry’s Labor Policy Council will determine the specifics of the system, including how to disclose such information.

With the nation’s labor force shrinking, it is important to secure female workers. In 2015, the government enacted the Law on Promotion of Women’s Participation and Advancement in the Workplace, which calls for companies to draw up action plans to promote the appointment of women. The aim to encourage companies to improve the treatment of women is understandable.

The Japanese Trade Union Confederation (Rengo) has strongly called for correcting the gender pay gap.

If companies can show that they provide a workplace in which employees can play an active role regardless of their gender, that is likely to enhance their corporate value.

According to a survey by the Organization for Economic Cooperation and Development, women’s wages in major European countries such as Britain and Germany are about 90% of men’s pay, while in Japan the figure is 77.5%. This discrepancy is attributable to the smaller number of women in management positions and the fewer years of employment among female staff in Japan.

However, circumstances that cause the wage gap between men and women vary from company to company.

If male-dominated companies actively recruit new female graduates, the number of women with fewer years of employment will increase. In this case, it is inevitable that the wage gap between male and female employees will temporarily widen overall.

Wage disparities tend to widen in the food business and other industries where many women work as non-regular workers. Simply obliging companies to disclose wage-gap figures across the board could be disadvantageous to some businesses.

The government said it would take steps to allow companies to explain the reasons for gaps and their efforts to correct them, to show consideration for companies’ specific circumstances. Needless to say, the government must continue to urge them to improve the treatment of non-regular workers.

Listed companies used to be required by the government to disclose wage differences in their securities reports. This requirement was abolished in 1999, in order to reduce the administrative burden on companies. The government is now considering asking companies to again include wage differences in securities reports.

A total of 22,000 companies have registered with the labor ministry’s database of companies promoting women’s career advancement, which provides data such as the percentage of women in management positions. It is hoped that such initiatives will be utilized to make it easier for job seekers to obtain information.

(From The Yomiuri Shimbun, June 19, 2022)