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.