Superficially Japan looks in good shape, but underneath it has important vulnerabilities. These have entered a gently but remorselessly vicious cycle: while the ageing and shrinking of its population is becoming more entrenched thanks to low marriage and fertility rates, the country’s use of its basic resource, the human capital embodied by a well-educated population, looks stuck in a trap of surprisingly low wages, insecure work and low productivity, which in turn depresses domestic spending and tax revenues while also suppressing marriage and fertility. Gender inequality lies at the heart of all these economic and social trends. The trumpeted reforms of ‘Abenomics’, implemented since Abe Shinzo’s return to the prime ministership in December 2012, have provided monetary and fiscal fuel so as to keep the economic engines running but have so far failed to find transformative solutions for low wages, job insecurity, and low productivity, or for declining marriage rates and low fertility. Solutions are available, if governments and corporations alike can show stronger will and an unambiguous commitment. A twelve-point agenda is proposed, including public policy reforms for the national minimum wage, marriage tax, immigration rules for domestic staff, labour contract law, quotas for political representatives, childcare spending, and university admissions tests; and private actions, for companies and other organizations in the way they manage human-resources policies, paternity leave, early-career experience for female staff, and the future of women-only universities.
The Marriage Tax Penalty in 2015