Mercer Japan Analyzes Company Results from the Ministry of Health, Labor and Welfare’s Database on Promotion of Women’s Participation and Advancement in the Workplace
29 Aug 2023
More than a year has passed since the Act on Promotion of Women’s Participation and Advancement in the Workplace was revised on July 8, 2022, making gender pay gap a mandatory item for disclosure for companies with 301 or more full-time employees. As the first wave of companies is making their disclosure available for public viewing, what could we deduce about the overall state of Japanese companies? Are there any trends that we could observe at this initial stage?
In this press release, Mercer Japan presents the results of its analysis based on the Ministry of Health, Labor and Welfare’s database as of July 6, 2023.
Average Gender Pay Gap for Full-time Employees by Industry Sector and Size
As of July 6, 2023, there were 5,520 companies with 301 or more full-time employees that have disclosed gender pay gap information in the Ministry of Health, Labor and Welfare’s database. We have tabulated the gender pay gap for full-time employees by industry sector and size brackets. Averaged across all companies in the data sample, full-time women employees’ pay is only 74% that of men.
In terms of industry sectors, welfare, education and healthcare industries have the narrowest pay gaps, while banking and insurance have the widest. Although different companies within the same industry may have different circumstances and different measures in place to address the gender pay gap, this ranking may be a reminder of the persistent influence of gender imbalance in labor that has become established in present-day Japanese social norms.
In terms of size, the smaller the size of the company, the narrower the difference between men’s and women’s pay tends to be. While there are various possible reasons for this trend, it should be noted that the published data includes relatively smaller foreign-owned Japanese subsidiaries, which could narrow the pay gap for smaller companies given that local firms are lagging behind their overseas counterparts in promoting women’s activities.
Gender Pay Gap and the Ease of Promoting Women Managers
※Definition of “Ease of Promoting Women Managers” Variable
The proportion of women managers as obtained from each company’s disclosure in the public database is divided by the overall proportion of women employees, in order to correct for differences in employee distribution in individual companies.
For example, two companies X and Y each with 10% women managers might seem equivalent, but if Company X has 50% women employees, a woman in Company X only has 10% ÷ 50% = 20% likelihood for promotion, whereas if Company Y has 10% women employees, men and women have equal opportunities for promotion within Company Y.
|Company X||Company Y|
|A = Proportion of Women Managers||10%||10%|
|B = Proportion of Women Employees||50%||10%|
|A ÷ B = Ease of Promoting Women Managers||20%||100%|
1. A positive correlation exists between gender pay gap and ease of promoting women managers.
2. The gender pay gap is likely to be smaller, and women managers more likely to be promoted, in non-manufacturing/service firms as compared to manufacturing firms.
|Gender Pay Gap||Ease of Promoting Women Managers|
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