Japanese firms take steps to close gender pay gap with historic reforms: ‘they have to change’ #JapanFinance

Japan’s biggest financial firms are abolishing decades-old employment practices that kept women off the corporate ladder.

Nippon Life Insurance, Japan’s largest insurer, and MUFG Bank, a unit of the nation’s biggest banking group, are among firms that in recent months scrapped a clerical job category that consisted almost exclusively of women, who were paid less than those on the career track.

Merging the two job types may increase opportunities for women to advance to more senior positions. Japan’s latest move to catch up with the West comes even as US companies start to reverse some of their diversity policies, under pressure from President Donald Trump’s administration.

The divided system was long used in other industries too, resulting in Japan having some of the biggest pay gaps between women and men in the world, but the financial sector is one of the worst offenders and has been slow to change. Work was often structured in the past so that women were expected to stay at their jobs for just a few years, marking time before marriage. That’s become rare recently, but the system has stayed in place.

Women in Japan earned 75 per cent of men’s wages across all industries in 2023, compared with 62 per cent for financial firms and insurers, according to data from a government-led panel on women in the workplace. That figure dropped to 50 per cent for Mitsubishi UFJ and just 39 per cent for Nippon Life in the financial year that started in April 2023.

A legal requirement to publish data on gender pay gaps introduced in 2022 has made the disparities more visible, according to Mioko Bo, an associate fellow at NLI Research Institute.