The Diet passed a bill Friday aiming to promote the role of women in the workplace, along with greater female participation in the economy at a time when the country’s population is expected to shrink further.

The law will oblige companies with 301 or more employees, along with central and local governments, to set numerical targets for the employment and promotion of women. They will also have to disclose this information to the public. Smaller companies will only be required to make efforts to do so.

But the law, which will take effect April 1, does not stipulate mandatory numerical targets, meaning that companies can set their goals after analyzing their current situation.

There are no penalties even if they fail to reach their goals. Instead, those that make great strides in hiring and promoting women will be given preferential treatment in contracts for public works.

Observers welcomed the passage of the bill, saying it could boost companies’ efforts to create more female-friendly environments and change the male-dominanted work culture.

However, they said many issues still remain for realizing a society where more women can use their potential talents.

“The law may be a little step, but quite an important one (to promote women in the workplace),” said Mari Miura, a professor of gender and politics at Sophia University.

Although there are no penalties or mandatory numerical targets, the required disclosure of plans meant a company’s public image could be damaged if they failed, Miura said.

Disclosure of information will also likely change the way female students look for jobs, Miura said, as they can choose employers providing better working environments by comparing each company’s action plans.

Those failing to make serious efforts may not be able to employ top-notch female students, which will be crucial given the country’s shrinking population, she said.

“From management perspectives, companies that can not hire excellent female students will not have a promising future,” Miura said.

According to the Japan Institute for Labor Policy and Training, the percentage of women in management positions in 2013 stood at around 11 percent, while the percentage in the U.S., U.K., France and Sweden was between 30 percent and 40 percent.

The figure is also falls way short of Prime Minister Shinzo Abe’s goal of 30 percent by 2020.

Meanwhile, Yasuko Oshima, a senior economist at Mizuho Research Institute Ltd., said the bill should have included minimum numerical targets that companies should aim for, in accordance with their size and industry.

Without such requirements, they may set numerical targets that can be easily achieved rather than risking failure with ambitious goals, she said.

“Lack of such minimum targets could weaken effectiveness of the law,” Oshima said.

Observers also said Japan’s long-held corporate culture of long working hours must change in order to realize Abe’s much-touted society “where all women can shine.”

Due to Japan’s corporate culture where people who work long hours tend to get promoted, women often have no choice but to quit jobs when they have a child, they said.

According to a National Institute of Population and Social Security Research 2010 study, around 60 percent of women quit work following the birth of their first child between 1985 and 2009.

“The mindset of men is changing, and there are many men who want to participate more in raising their kids. But (Japan’s corporate culture) won’t let them do so,” Miura said.

“I believe the bottleneck is due to the male top leaders’ way of thinking. Many of them are still hung up with outdated ideas that men should be the ones who earn a living. That should be changed.”

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