Japan's Top Banks Face Stark Gender Pay Gap

Women working in Japan's top banks face a troubling gender pay gap, earning just over half of what their male counterparts do. Despite Japan's relatively high female labor force participation, women frequently work in part-time jobs with limited opportunities for advancement and greater pay. Claudia Goldin, a Nobel Prize economist, recently raised this topic.

Following the implementation of mandated gender pay gap disclosure last year, data indicate that female employees at Japan's top banks receive just 54.9% of their male counterparts' wages. According to an investigation by advising company WTW and others, Japan ranks among the worst in the OECD for gender pay discrepancies, with the banking industry being one of the worst violators.

Women are underrepresented in leadership roles in industry and politics due to deeply ingrained gender conventions, putting Japan well behind other industrialized nations. In the World Economic Forum's 2023 gender gap report, Japan now ranks 125th out of 146 nations, notably in economic participation and political empowerment.

Experts emphasize that openness alone will not close Japan's gender pay disparity. Companies must not just publish data, but also develop clear improvement strategies, put them into action, and continuously monitor progress. Banks ascribe most of the salary disparity to women's underrepresentation in management positions and their proclivity to take lower-paying jobs under Japan's two-track recruiting system.

Experts urge for tighter restrictions, such to Iceland's "equal pay, equal value" law, to make considerable headway in narrowing Japan's gender wage gap. While Japanese banks are addressing the issue by removing the two-track recruiting structure and increasing female participation in executive jobs, more comprehensive measures are required to develop a more gender-equal society, especially given Japan's dwindling population.