Equal Pay for Equal Work-Part 1

August 9, 2024 ［No.125-2024］

FUJIMURA Hiroyuki
President, The Japan Institute for Labour Policy and Training

 

 

 

-    Wage gap between regular and non-regular employees

“Equal pay for equal work” is one of the Japanese government’s labor policies. It is based on the concept that companies should pay people doing the same job the same wage, even if they have different employment statuses, such as regular employment or fixed-term employment.

In societies where wages are decided for each job, people’s wages are naturally equal if they have the same job. However, as wages in Japan are merit-based, regular employees usually earn more than non-regular employees. This is because, even though both regular and non-regular employees are assigned to the same job, you can see after a day’s, week’s or month’s observation that each class of employee does different things.

Regular supermarket employees, for example, stock shelves and keep them neat and tidy, place purchase orders, and handle complaints. They also must do overtime if a problem occurs that has to be dealt with on that day. Non-regular employees, on the other hand, work at the cash registers and stock shelves, and leave work at an agreed time. In the case of stocking shelves, regular and non-regular employees do the same job. But otherwise, as these two classes of employees do different work each day, they receive different wages.

The Japanese government implemented an “equal pay for equal work” policy to address the nation’s falling birthrate. In postwar Japan, the total fertility rate was 4.54 in 1947, fell below 2 in 1961, and has been declining since, reaching 1.20 in 2023. At the same time, the death rate is rising due to the country's aging population. As a result, Japan is facing a decreasing population. Stopping the falling Japanese birthrate is a priority for its government.

 

-    Falling marriage rates cause falling birthrates

Only 2% of children are born outside marriage in Japan. As such, it is generally believed that people should get married before having children. However, more and more young people are not getting married. According to the national census, in 1980, 9.1% of women in their early 30’s were unmarried, but that number had risen to 35.2% by 2020. It appears that the reasons why people do not get married are changing views on marriage and falling incomes. Previously, Japanese society felt that women should marry before they reached their mid-20s, but now, it is accepted that they can wait until they meet the right man.       

The Longitudinal Survey of Adults in the 21st Century suggests that lower incomes have led to a lower marriage rate. According to this survey, regular employees and employees on higher incomes were more likely to get married than non-regular employees and employees on lower incomes.

To stop the birthrate falling, the number of young people who get married must increase. Although this is considered to be a job for the government, this has been difficult because changing individuals’ views on marriage interferes with their freedom of thought. On the other hand, the government has some influence over increasing younger people’s incomes. As such, the “equal pay for equal work” policy was formulated within this context.