Boosting the female workforce

The Abe administration is pushing for a review of the tax and social security benefits for households with full-time housewives or low-income housewives, on the grounds that such rules serve as disincentives against women’s greater participation in the labor force even as the nation faces a steep decline in its working-age population.

In making the review, the government also needs to look at other hurdles that discourage women with children from spending more working outside the house. Otherwise, it could end up merely adding to the burden on households by abolishing or scaling down the benefits.

Salaried workers can have their taxable income reduced by ¥380,000 if their spouses earn less than ¥1.03 million a year. If the spouses earn between ¥1.03 million and ¥1.41 million, the main bread earners can still deduct an amount lower than ¥380,000 from their taxable income. Separately, if the spouses earn less than ¥1.3 million a year, they can be exempt from pension premium payments and be covered by the main bread earners’ corporate pension schemes.

Many of housewives who work part-time jobs are believed to adjust their work hours and keep their annual income from surpassing these thresholds to retain the status advantageous in tax and pension premiums.

Meanwhile, there has been criticism that these rules favor single-income households over dual-income families, which — unlike decades ago when the rules were introduced — account for a majority of Japanese households today.

Prime Minister Shinzo Abe in March told a joint meeting of the government’s Council on Economic and Fiscal Policy and another panel on industrial competitiveness to consider changes to the rules as a means of promoting women’s greater participation in the workforce.

In the background is the alarming decline in the nation’s working-age population between 15 and 64 years old, which in the 2013 statistics fell 1.16 million from a year earlier to 79 million — below 80 million for the first time in 32 years. With the rapid aging of the population and low birthrate, experts warn that the number of working-age people would fall by another 10 million to below 70 million by 2030.

It makes sense to tap into Japan’s under-utilized workforce to make up for the labor shortages and to support the nation’s economic vitality. Still, the government needs to realize that it requires more comprehensive efforts than simply eliminating the spousal tax and social security benefits to boost the labor participation of women, especially working mothers.

A record high 63 percent of women aged 15 to 64 held jobs as of last September, up 6.2 percentage points compared with a decade ago, according to an Internal Affairs and Communications Ministry survey.

Part of the rise was attributed to an increase in the number of single-working women amid the recent trend to postpone marriage. The rise in employment was particularly evident among women in their 30s.

But the survey also showed that only about 40 percent of women continue working after the birth of their first child, highlighting the need to provide support for families with children both at home and work. The survey showed that 56.5 of the women are being hired as part-timers — a ratio much higher than the 21.3 percent for men. While part-time status is seen as one reason that women find it difficult to continue work after childbirth, women with full-time jobs — particularly in metropolitan areas — often give up or postpone returning to work following child-care leave after failing to find nursery schools for their children.

During a recent meeting of the government’s Tax Commission to hear opinions about the spousal tax deductions, experts pointed to the need to change the broad social environment, including child-care infrastructure and the lingering wide wage disparity between men and women, in order to encourage more female labor participation.

One of the experts said there is a deep-rooted gender-based division of labor in which the responsibility of housework and child care tends to concentrate on women, who end up giving up jobs after marriage or childbirth. It is surely a challenge that cannot be addressed by merely changing the tax or social security provisions.

  • “…there has been criticism that these rules favor single-income households over dual-income families, which — unlike decades ago when the rules were introduced — account for a majority of Japanese households today.”

    People are going to make choices. And the presumptions of about “how things should be” unconsciously shape policy-making. In the past, single-income families were the status quo, and the government created incentives and rules around this fact. And now those old rules have become barriers to the current way the cultural has manifested itself.

    This editorial instructs us to adapt to the modern changes in attitudes and values (whether some disagree or not).

    We think we know better than those who made those laws we wish to change; we’re “progressive”. and adapting to the “needs” of today. In reality it is the same old social engineering, just engineering today’s cultural status quo, which will be gone tomorrow —passing the problem down the road, instead of addressing the root — just as the current laws have done to us. These “needs” are merely problems created by the very laws created to solve earlier problems, which were created to solve the problems created by the earlier laws which…and so on.

    Changes in culture have only become fact based on the aggregate choices of individuals. With time, those choices can change as individuals do and as people live and die — especially with government after government “tinkering” with the economy and creating a situation where a household “needs” at least two incomes to function.

    So people have made different choices. And while we wish to dispose of the old rules, we do not wish to dispose of the old method of thought which brought us those rules.

    The answer to our problems, we are told, is to repeat the same mistake. It is a promise to place the future youth into the
    same situation we are currently trying to get out of, when their values (and economic situation) will not reflect the law anymore. Then we’ll have to change again. But before changing, we’ll be suffering, we’ll be experiencing one less innovation that could save lives and time, one less cure, one less mind that could have done great things; a mind choosing to do something else because of the rules we have created don’t reward his or her best.

    Yet none of this would be a problem if we had started in the right place.

    Modern politics largely consists of implementing narrow ideas, then
    putting the nation into an eternal state of political reaction to the
    failure of the resultant policies; forever lagging behind cultural change.

    This may be of benefit to those who claim to have “solutions”, those with a desire for political power, or those who need to “feel important” more than face reality’s simple demand to be productive, but it is anathema to progress, growth, innovation and freedom. That mindset brings everyone down, stifling economic growth and opportunities for all.

    We do not need “new rules that accurately reflect current values of the people”, the only “rules” that are needed are ones that treat
    individuals as the autonomous decision-makers that they are — and that they will choose to form families, or not; or some other kinds of relationships, or not; choose to have children, or not; to work full-time, or not; to start their own business, or not.

    The proper standard for government policy is not “the barometer the culture of the moment”, or which group happens to form the majority of the moment, or what the economic statistics happen to be this decade, or what the birth rate is because individuals are making choices that you haven’t yet legislated (unlike China) — it
    is about the nature of human beings. It is about aspects of being human that don’t change.

    Culture and law are separate. Culture is what citizens decide to
    make on their own, and is not a proper target of state engineering.

    Dear politicians: get out of the way. Let people take care of themselves. You only disempower us. We can do it, you can’t. But that’s exactly why you chose to become a politician, isn’t it?