Adapted by:
Rubén Andrés
WriterWriter at Xataka. I've been working remotely for more than a decade and I'm a strong advocate of technology as a way to improve our lives. Full-time addict of black, sugar-free coffee.
Karen Alfaro
WriterCommunications professional with a decade of experience as a copywriter, proofreader, and editor. As a travel and science journalist, I've collaborated with several print and digital outlets around the world. I'm passionate about culture, music, food, history, and innovative technologies.
Japan faces a historic challenge. On one hand, the labor shortage has forced companies to rethink policies to take advantage of a coming economic boom. On the other, the country’s low birth rate collides with that labor shortage, as it would mean losing—at least temporarily—half the workforce: women.
The demographic crisis has pushed Japanese companies to adopt a measure largely absent for the past two decades: equal pay for men and women.
Killing two birds with one stone. While in the U.S., executive orders are rolling back DEI programs, Japan is heading in the opposite direction—equalizing salaries to attract female talent and promote career growth.
Beyond the practical value of filling the labor gap, the shift also has financial motivations. Japan is attracting growing environmental, social, and governance investment, much of it diverted from the U.S. after President Donald Trump took office. As a result, financial companies such as Nippon Life Insurance and MUFG Bank are scrapping pay policies that sustained the gender wage gap.
Two decades of wage discrimination. For the past 20 years, Japanese women have earned less than men for doing the same job. According to Japan’s Ministry of Health, Labor and Welfare, women earn just 74.8% of men’s wages on average. In prefectures such as Tochigi, the gap widens—women earn only 71% of what men do. By comparison, women in OECD countries earn about 88.1% of a man’s wage for the same role, according to 2023 data.
This wage gap is deeply embedded in Japan’s employment model. Traditionally, companies offered men lifetime jobs, with raises and promotions tied to seniority. When women became mothers, they were often moved into part-time or temp roles with lower pay and little opportunity for advancement. This pattern, called the “L-curve,” reflects the steep drop in women’s pay and participation after motherhood, making it difficult for them to return to leadership roles.
There’s no labor surplus. Japan is dealing with a severe labor shortage. A study by Chuo University in Tokyo estimates the country will be short 3.84 million workers by 2035. Its aging population and declining birthrate have shrunk the available workforce, making it essential to tap into the female labor pool to sustain economic growth.
To attract more women, companies have begun adjusting employment policies. To encourage women to return to work after maternity leave and continue advancing in their careers, businesses now offer equal salaries, promotions, and seniority-based rewards.
More than salary: family balance. Women traditionally take on the majority of childcare responsibilities in Japan. Official studies suggest equal pay alone isn’t enough to attract and retain female workers. Companies have responded by introducing work-life balance policies such as reduced hours and remote work, allowing women to care for their children without stepping away from their careers.
Cities such as Tokyo have already rolled out shorter work hours and four-day workweeks to boost birth rates and improve work-life balance. The move toward wage equality may help spread these policies to more regions, making it easier for women to secure stable employment without sacrificing family life.
Image | Chloe Evans (Unsplash)
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