I
don’t have the time to do justice to opinion pieces but from what I gather from
the headlines, Noah Smith appears to have given up on critiquing Japan’s political
and social scene and mostly focused on being an advocate for the Japanese
economy. Probably a wise career move. But his latest eye-catching headline “Abenomics
Looks a Lot Like Reaganomics”caught my attention, and I have this to say.
Dr.
Smith attributes the rise in the participation of women in the workforce to Prime
Minister Abe’s “Womenomics” and stagnant wages. But Dr. Smith’s graph shows
that Japan’s female labor force participation rate on the rise in 2013, effectively
the first year of the Abe administration. What were the “Womenomics” policies in
place off the bat that made this happen? As for stagnant wages, that’s a
decades-old problem. What has made it so relevant during the Abe administration
years?
There
is something missing from this narrative: the recovery from the 2008-2009
financial crisis and the 2011 Great East Japan Earthquake Disaster playing out
against the background of a declining working-age population and the current, synchronized
well-being of the global economy. In short, it is far more sensible to see the
rise in the labor force participation rate of Japanese women as a reflection of
the rise in the demand for flexible, non-regular (temp, part-time, etc.) labor
in a virtually full-employment environment. In other words, good old-fashioned,
supply-and-demand at work rather than any policy initiatives whose specifics
Dr. Smith would have a hard time identifying.
But
then, what do I know? I’m not an economist.
