End of two-track system no help to women

By Kaho Shimizu, The Japan Times, Friday 24 October 2003

Gender wage gap ingrained

As the protracted economic slump prompts companies to shed the time-honored practices of lifetime employment and seniority-based wages, another victim of the cost-cutting ax is the two-track hiring system that has effectively kept women&s wages lower than men&s.

But instead of raising the status of women with the phaseout of the contentious practice, which has been criticized for fostering sexual discrimination, experts believe women may find it harder to hold full-time jobs, because the lower-level positions they have dominated will increasingly be filled by part-time and temporary workers.

The two-track system includes a management fast track and a slow path for routine, clerical work. Although both are ostensibly open to both sexes, men have dominated the fast track while women are usually found in the subordinate path.

One main reason companies have introduced such a system is that it helps them reduce labor costs by effectively keeping wages lower for noncareer-track employees, said Shiho Futagami, an associate professor of business studies at Yokohama National University who has been studying the wage gap with a labor ministry panel.

Because those on the secretarial track have almost no chance of promotion to management, the United Nations Committee on the Elimination of Discrimination against Women has blamed the system for the wage gap between men and women in Japan.

According to the Health, Labor and Welfare Ministry, the average salary level for women in 2001 was 65.3 percent that of men. This compares with a gap of 76 percent in the United States in 2001, a gap of 80.6 percent in Britain in 1999 and a gap of 79.8 percent in France in 1998.

Many big name firms started using the dual-track system in the mid-1980s after the Equal Employment Opportunity Law took effect in 1985. A labor ministry survey in 2000 showed that 7.1 percent of Japanese firms had the system and that larger companies were more likely to adopt it.

The law only requires companies to ensure that both sexes have an equal opportunity to apply for a job—it does not stipulate anything about the ratio of men to women on the two tracks. Therefore, a number of firms used the system to keep female workers in clerical positions, Futagami said.

She surveyed wage patterns of firms in 2002 that used the two-track system. Citing one firm&s wage system as an example, Futagami explained that when workers are at age 25, there is little difference between the two tracks, but the gap widens with age. By age 45, the salaries of those on the managerial track were more than twice that of people on the subordinate track.

But the question remains—why do women opt for the subordinate path knowing their salaries will be kept low?

One reason, according to Futagami, is that many firms link the managerial path to the possibility of later being transferred. But attaching such a condition with career paths is absurd, she argued, because it has nothing to do with a worker&s ability.

Women are forced to apply for the subordinate track not because they are incompetent but because many know they cannot afford to move after getting married, she said.

Many female workers have other reasons.

A 26-year-old woman who has been on the clerical track at a financial institution for more than five years said she definitely does not want to be on the managerial path, which is regarded as a commitment to one career.

I don&t intend to stay (here) once I get married, she said, adding that she thinks many female clerical workers share the same view when they apply for a job.

She said the situation will not change as long as the deeply rooted social attitude that men should work to support the family while women stay at home to do housework persists.

As far as she knows, there are no men on the clerical track where she works. Male workers couldn&t cope with the low salary I receive, because men have to support a family, the woman said.

Most women accept this as a fact of life, probably since we are brought up that way, she said.

However, the situation is gradually changing. Many firms, including the woman&s employer, have begun to cut back on clerical-track hiring and are using more temporary workers.

Gakushuin University economics professor Akira Wakisaka said this is a result of their need to cut personnel costs and stay competitive, as temporary workers and part-timers are less costly to hire.

According to Wakisaka, the dual-track system is also no longer helping companies distinguish between women who were willing to work equally with men and those who did not intend to stay on long.

Companies hired workers for the clerical track assuming they would quit after a few years, he said. But in fact, their length of service is getting longer.

Most female clerical workers initially plan to leave once they marry, but given the current state of the economy many are now staying on even after marriage out of financial concerns. Continuing clerical work after marriage is also not too difficult, since such personnel are seldom expected to work overtime, Wakisaka said.

But because the two-track system now effectively raises an employer&s labor costs if clerical workers stay on longer, firms are doing away with it for financial reasons, not due to an improvement in women&s rights, he said, predicting the day will come when the system no longer exists.

The wage gap will continue, however, because women account for most of the part-time workforce, he said. A 2002 labor ministry survey of 42,000 firms showed that nearly 80 percent of their part-time workers were women.

The focal point (of the wage gap debate) has shifted (from the dual-track system) to the gap between full-time workers and temporary workers.