Kathy Matsui takes stock of Abe’s 'womenomics' reforms

By Annabelle Landry

During a recent talk organized by The Women’s Fellowship of Tokyo Union Church, Kathy Matsui, Vice Chair, Chief Japan Strategist at Goldman Sachs and the person who coined the term “womenomics”, took a look at the progress of Prime Minister Shinzo Abe’s “womenomics” policies, what has been achieved, and what remains to be done. She also discussed some of the professional and personal challenges she has faced during her 25-year career in Japanese finance.

A regular churchgoer, Matsui was born to Christian Japanese parents who immigrated to the United States from Nara Prefecture. She was raised in California, where the family operates a large-scale commercial flower nursery in the Hispanic-dominated, agricultural region of Salinas Valley. “When I came to Japan, I didn't speak fluent Japanese,” she said, observing that she was much more proficient in Spanish during her high school years.

In the spring of 1990, she landed a job in the Japan Strategy team of Barclays de Zoete Wedd Securities, where she provided advice to institutional investors on the Japanese stock market. That was a year after the market peaked in December 1989.

During some of the earlier days of her career, however, the Nikkei was plummeting by more than a 1,000 points per day. “Forecasts were suggesting the population was going to shrink and economic growth would slide given the growing mountain of fiscal debt,” Matsui said. “Overseas, there was a growing fear that the bursting of Japan’s asset bubble would lead to a prolonged economic downturn, leading investors to ask such questions as: 'Why should we even bother investing in Japan?' Where is future growth going to come from?” That's when the idea for her first “womenomics” report came to her.

It was 1999, five years after Matsui had moved to Goldman Sachs, and she was pregnant with her second child. “The idea for the report, she said humorously, may have been spurred by excessive hormonal activity in my body.” At the time, lifting female labor participation was not a widespread concern. “Back then, no one spoke about demographic challenges and the words ‘gender diversity’ were not part of the Japanese vernacular.”

Matsui’s talent didn't go unnoticed. In 2000, she was promoted to become the first female partner at Goldman Sachs Japan. Her reputation quickly spread overseas, where she was chosen, in 2007, by the Wall Street Journal as one of “10 Women to Watch in Asia” for her work on “womenomics”.

Finally, in 2013, grasping the scope of the problems stemming from a rapidly shrinking population, Abe’s government drafted its National Growth Strategy. “Abe realized that given the severe demographic headwinds facing Japan, making better use of the other half of the population might help improve the nation’s growth potential. Besides, given acute labor shortages (with 24% more jobs available currently than job-seekers in Japan), companies have recently begun hiring women more actively than in the past.”

While many question the progress realized by Abe’s “womenomics” policies, Matsui said there have been a few strides. For instance, compared to the mid-1990s when Japanese female labor participation was merely 56% (one of the lowest in the OECD), the ratio has spiked in the last three years, reaching 65% in 2015, surprisingly topping that of the U.S. at 63%. There is, however, one caveat: the majority of jobs that Japanese women have been taking up tend to be part-time as opposed to full-time.

Currently, temporary workers account for as much as 40% of Japan’s total workforce, and 70% of these jobs are held by women. Moreover, Matsui argues that Japanese women are still woefully underrepresented in leadership positions, whether in the Diet, ministries, company boards or executive management, remarking that “we still have a long way to go.”

One encouraging step forward was the passage of an important law in August 2015 called “Female Employment Promotion Legislation” which will require large firms and public entities with more than 300 employees to disclose gender diversity targets accompanied by specific actions plans starting April 2016. While some companies are reluctant to comply, she believes that peer pressure will eventually lead to target setting, and this will prompt greater transparency and accountability.

Citing Abe’s “womenomics” policies to tackle the childcare shortage and extend parental leave, Matsui pointed out: “Improving the capacity of daycare and elder care is obviously critical, but it is also important to educate society about the benefits from greater diversity. Perhaps the biggest obstacle is the mindset. There are many ‘myths’ about “womenomics” that need to be overturned if we are going to make more progress from here.”

For Matsui, one recurring myth about “womenomics” is to assume that Japanese women “simply aren’t ambitious enough” to pursue a career. “Many women want to return to work after having children, but there are few support mechanisms to help them re-enter the workplace.”

At Goldman Sachs, she said, “we have had a program in certain offices called 'returnships.' The program aims to bring back women who left the financial industry by giving them the opportunity to experience different divisions at the firm, and several of these women are eventually offered full-time jobs after the program.”

Goldman Sachs also solved the daycare problem by opening its own daycare center facility near its Tokyo office which has been "an amazing recruiting tool," according to Matsui.

As to the inequitable division of responsibilities in the household, she said that while it’s easy to blame the Japanese men, the problem is more deeply-rooted in the incentive structures within typical Japanese companies where seniority is often valued more highly than output or performance. Under such a system, it should be no surprise that the men are incentivized to maximize their time at work and minimize their time at home. So to alter this, companies need to re-think their employee evaluation and promotion systems altogether.

But change must also come from inside the home and within families. “The way we raise our kids heavily impacts how we define gender roles.” During her frequent overseas business trips, she said that she would often – subconsciously - bring home “a Lego kit for my son and a pink Barbie doll for my daughter.” What Matsui is saying is: “If we want to shape role models that reflect today's realities and encourage for women to pursue careers traditionally filled by men, we have to tackle unconscious biases within society.”

Besides educating society about the importance of diversity, it is also crucial to engage male leaders. As Matsui pointed out: “To foster change, we must start with ‘male champions’ who are sympathetic to greater diversity and can help drive the necessary shift in mindset within the broader population.”

Despite the recent progress in female employment, Matsui still encounters considerable opposition to her “womenomics” ideas, and one of the most frustrating arguments is that “Japan takes forever to change.”

She strongly disagrees: “Japan takes a long time to DECIDE to change, but given the homogenous nature of this society, once change starts, my advice is: don’t blink.”

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I have read decades ago that French people work on average 6 hours a day and that they were trying to reduce it to 4 hours I wonder if that is the future to most developed nations ...and also to a world even more highly technological...

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What a load of guff ! What has been achieved in 'womanomics' ? Didley squat seems to be the size of it.

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Alistair Carnell

What a load of guff ! What has been achieved in 'womanomics' ? Didley squat seems to be the size of it.

So true. Kathy Matsui, while I respect her family (her father did a lot of charity work), has, with her husband Jesper, been totally off the mark with their praise for Abenomics. In any other profession, such mistakes would have soon led to a quick exit, but aahhh, the financial/banking industry... the world of the eternal bailout.

Ms. Matsui's bigger mistakes among many

Large numbers of Japanese women may graduate from a Japanese university, but most Japanese universities, up to post-grad level, are on the same level as pre-university level education in the US and UK.

The LDP cohorts were never into women empowerment in the workforce, they were, as Noriko Hama quite happily pointed out, into women employment at the lower echelons, so they would be an extra source of tax revenue.

Completely failed to read the hone and tatamae of Abenomics. The tatamae of Abenomics was all the guff Abe spoke, while the hone was the usual LDP currency weakening/propping up Japan INC and public works/pork barreling support for LDP special interests.
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