Japan's tax laws get in way of more women working full time
japantimes.co.jp
japantimes.co.jp
First configuration: Person A engages in wealth creation by running the household, raising the children, etc. etc. That wealth-creation is tax-free since it's never paid for in monetary terms. Whatever time is left over can be spent doing jobs that don't demand fulltime status. Those jobs don't pay as much on an hourly basis, but that income will be very tax efficient as the total sum of money will be lower and therefore a larger proportion of it will end up in the lower income-tax bands. This frees up person B to do a fulltime job, maximizing income (albeit earned in a less tax-efficient way).
Second configuration: Both person A and person B do a fulltime job, maximizing income. Now they both pay a lot of taxes, since the both earn a lot of money. They use some of the money left over after taxes to pay for a nanny, housekeeper, etc.
In order for first and second configuration to "break even" the hourly rate for person A under the second configuration would have to be A LOT more than under the first configuration to make up for the added inefficiency in tax.
My contention would be: It's pretty rare for both person A and person B to be able to earn so much under the second configuration so as to break even with the first configuration (as measured by hosehold disposable income, i.e. after taxes and everything).
This depends on your timescale. If you look at the tax returns of years 0-5, your contention will look spot on. If you compare the tax returns of two couples -- with double income in all years vs single income for years 0-5, you may find that in the long run, given the sacrifice involved in taking a career break for 5 years, it is in the favor of the couple to shell out in big in those 5 years.
Don't forget working also adds extra costs for commute, professional clothes, food at workplace etc.
And then you got certain joys in raising kid on your own. Which can be translated into monetary scheme too - how much you have to earn extra to compensate for that by buying all sorts of shit (be it things or experiences)?
[0]https://www.arcgis.com/home/item.html?id=083db34f40f94a55a26...
The other dimension of the full/part vs full/full configuration is elasticity in case person A has a crippling injury or is otherwise unable to work full time. If your lifestyle is set up with a need for maximal income, it's very difficult to take a large hit like losing one full time income.
On the other hand, if there is the slack to allow person B to take on full-time employment and have person A do whatever (if anything) they are able on other fronts, then it may be possible to get the bills paid. It will likely be at the expense of a less ideal home life, but that beats the heck out of having mounting debt or being evicted due to financial obligations that cannot be filled.
It's much like the engineering principle of designing a 25-50% material strength buffer into infrastructure where failure would have a large negative impact.
I realize its an oversimplification in MANY ways, but this is more of an issue further down the income ladder. e.g. losing that 2nd income means that you can't pay rent or buy food, vs higher income couples where you might have to give up a vehicle or look at re-mortgaging the cottage on the lake. Those with higher aggregate incomes would also find it easier to have an emergency savings fund vs living paycheque to paycheque
(I'm ignoring the question of whether full time employment in a career is a fundamental requirement for a fulfilling adult life)
The author tries really hard to make this a woman's issue, but as far as I know the law doesn't lay out different rules for women specifically, just the less-earning spouses that take care of the children, so the same problems exist for husbands that stay at home. However, women universally tend to not marry "down" when it comes to finances, education, etc., while men do. They also tend to find men without a career to be unambitious, which is generally considered to be an unattractive trait in men for romantic purposes. This is true for poor countries rife with sexism, as well as for rich countries that treat women and men equally. (All of this has been covered by extensive sutdies) In Japan in particular young women tend to have high expectations of men, because their parents and grandparents had no financial issues during the economic bubble and their mothers and grandmothers did not have to work at all or much. Many Japanese women can't wait to marry in order to start a family and stop working; it's their life goal and they only consider their career to be temporary from the start. This even true for most women who graduate from elite universities in Japan (I saw a study about Tokyo university graduates mentioning this). So that's why in practice we're talking about mostly women here and I wouldn't blame men for that.
The argument about the time spent on housework also sounds rather weird and insignificant to me, because it mentions a significant gap between men and women, but also mentions that Japanese spend less time on housework in general. 263mins = 4h23m a week is a number that I pull off without trouble as a single man working full-time without the least bit of help from a spouse. The article also doesn't mention whether this number is limited to families with children or the whole population.
The part about bento boxes is just a meme. Women are not considered to be bad mothers if they don't create bento boxes that look like Pikachu and friends.
There are legitimate issues for women working in Japan, some of which we have in other countries, some we don't, but I don't see any of them in this article. All I see is "less-earning spouses (usually women) get too many benefits, that's why the alternative of working isn't attractive enough". And instead of complaining about beautiful bento boxes, the author should draw attention to serious issues like the incredible lack of kindergarden spots and the like.
I don't want to understate the difficulty that women have in the workplace in Japan. The breakfast and lunch are manageable, but then you have to do laundry (and if you have school kids, it's a big job in Japan). People hang their laundry outside, so it's a problem if you aren't there to get it if it rains. You have to be back in time to cook dinner for your kids, but you have responsibilities to stay late at work most days, etc, etc. Some of my female colleagues barely slept and it just wasn't healthy.
Distributing the workload is not so hard, but it needs a cultural shift. It's slowly happening though. You may note that my wife cooks for me now and wonder why... I liked doing breakfast and lunch, but I think my wife prefers doing it herself (my bentous aren't very good, I'll admit). I suspect (but don't know) that she also feels better, as a woman, if she does that job. That's a strange idea in western culture, but perhaps it will sound more understandable if I say that I feel better, as a man, if I make a salary. Stupid and arbitrary, but culture is like that sometimes. It's hard to change and you need to go slowly.
The article doesn't claim that the law is intentionally discriminatory. It says that the law disincentivizes women to work, which can be true even if that is not the intent of the law. Stricter voter ID requirements don't facially discriminate between different groups, but they still have the effect of suppressing voting by minority groups because of how they interact with other social factors.
And the underlying claim is an uncontroversial one in economics: tax or welfare benefits that phase out with higher incomes disincentivize work. That's a generic truth about economics. It just happens to be a "woman's issue" in this context because (1) women happen to disproportionately have the lower paying jobs, because of gender norms; and (2) Abe's government is trying to get more women in the workforce to deal with Japan's crushing labor shortage.
I might have worded it poorly, but it wasn't my intention to imply that the author of the article blames the law for it. I was merely trying to point out explicitly why this article is about women, and that it's not due to discrimination by the government through law. Furthermore I don't even think that this happens indirectly as you pointed out as possibly the case with your comparison to voter ID.
I also tried to mention explicitly that the "gender norms" you refer to are apparently mostly not imposed by men on women, but women on women. The article doesn't discuss this at all, instead mentions men spending less time with housework (which they probably even do in single households), etc.
Your points are all correct in general, but I don't see how it goes against the argument of the article. It seems you are detailing the behaviours women end up taking facing the current situation, while the author argues about ways to affect the root cause.
As I implied in the first paragraph of my previous comment, even if we supposed that no pay gap existed, I don't think that it would solve the problem. Studies have shown what would happen: single women would improve their careers, thereby reducing the amount of men that are doing better than them, thereby reducing the pool of potential spouses they would even consider. Ultimately this would not result in those women picking men that are doing worse than them and have them take care of the household and children, instead they would stay single. So the situation for women that have started a family would not change much, because those are mostly the women who have found somebody at their level of success or above.
You're absolutely correct that I'm detailing the behaviors of women. I do so because I recognize the problem you're trying to solve with your suggestion to solve things with policy regarding pay (I assume), but I think the cause is not rooted in policy but in culture, specifically women's ideas of an ideal mate.
Any study that would for instance focus on a microcosm where women earn as much as men wouldn’t be isolated by the rest of society’s effect on the individual’s value system or image of success.
What I mean is culture is influenced by reality, movies like Pretty Woman weren’t setup that way by pure imagination, the authors still wanted a somewhat realistic starting situation.
Same with parents raising their kids, the culture they foster depends on their experience of life. If for their whole existence women couldn’t build a family without their career getting in the way, they’ll hedge their bets when raising their daughters.
I don’t think the author’s proposition will easily pass in the current political climate, but I’d see the value in trying to change reality first, to have people acknowledge that the game has changed, and think for themselves better strategies for their life.
I’d compare it as how family values have changed in countries where elderly get government help. While for centuries they’d clinge to their kids as the primary source of retirement support, once a generation or two actualy saw that they could mostly get by by themselves, kids/parents relations changed, culture changed.
I should also point out that the piece is full of misleading information used to bolster their argument. For example:
"Prior to 2018, a person who made no more than ¥1.03 million a year in income did not have to pay income tax and could be claimed as a dependent on their spouse’s tax return, meaning a deduction of ¥380,000."
This is completely dependent upon the spouse's salary. ¥1.03 million is about $10K, just in case you aren't familiar with the currency. A deduction of ¥380,000 is 38% -- which implies that the marginal tax rate of the spouse is %38 percent. This would be a huge salary for the spouse in Japanese terms.
It's important to understand that personal income tax in Japan is very low. However, you have to pay a fixed 7% for pension and health coverage and another 5-10% for city and prefectural tax (depending on where you live). There are no deductions on pension, city and prefectural tax. Typically if you are paying an overall 30-35% tax rate, your personal income tax rate is only somewhere around 15-20%.
Have a look here and scroll down to the personal tax rates: https://www.japan-guide.com/e/e2206.html A 40% marginal tax rate starts at 18 million yen, or $180K. Yes, not so high in SV, but I don't know anyone where I live that makes this much as a salary.
A more typical marginal tax rate is 15 or 20%.
Like I said, this is typical for Japan Times "news" stories unfortunately. I feel odd saying this because while the piece is terrible, I actually agree with the idea of reducing dependent deductions and the need for more Japanese women to get positions in permanent positions in Japan.
Anything is justified to "stimulate the economy" I guess.
Let's discourage people from cooking at home, having guests at home, spending time in public parks and forests or at home with their kids...
GDP is happiness.
/s just in case
In that world, both sexes have to work. In our current times, folks have to work full time (whatever full time is). 40 hours a week it is until we can get that norm reduced, but that is a different issue entirely.
... even though it boggles the mind. You'd think if everyone works we could all work less. But reality seems to say otherwise right now.
They already have more pensioners than children being born. The same trend can be seen in virtually every single developed country. We are soon to going to not be able to afford to pay these pensioners if there are not enough people paying taxes. Hopefully you don't actually think pensions are somehow grown on trees.
Yes, we can print the money and the world won't end. There's not some automatic hyper-inflation that happens when money is minted. There's so much around already you see.
Think of cash as points in a game. If we keep playing games, racking up points, the points don't necessarily become worthless. They may change a little as confidence varies.
It's not about the imaginary points. Its about the goods and services. Goods depend, these days, mostly on automation which isn't going away. So little problem there.
That leaves services. Yes, they depend entirely on human capital. So we're going to have to automate, train assistance animals, or use technology to do away with the need. Especially among the elderly who traditionally require more services.
One can look at Germany's perspective on migrants as a direct consequence of that (more people working and contributing to the social fund means less of threat of the social structures hitting insolvency).
Though, there's no banners saying, "because of 'x', this is 'y'," one can still derive the subtext from the concerns that the nations are voicing.
So, all of this was just a long-winded way to say that it is a bit disingenous to say that people are complaining about falling birth-rates but it is still a valid concern for many countries - even if they don't come out and explicitly say it.
[0] - https://www.thelocal.se/20190216/hungary-family-plan-reeks-o...
I see some local news talking about some minor labor shortages with convenience stores and whatnot, but opening up BBC or CNN you'd think Japan is on the brink of absolute collapse due to being underpopulated with only 120 million people on a tiny, mountainous, barely arable archipelago.
This isn't the cause of two-income households because Japan is quite broadly one-income households...? This is almost entirely irrelevant to two-income household discussion. (I'm not decided personally how I feel about it, merely pointing out this specific comment is making 0 sense to me)
Having more people is better for us on net because it gives us more human capital and allows us to develop technologies that pay off at scale.
As the world population has grown, our society has gotten wealthier on a per-capita basis, and we still have more than enough food to go around.
It’s not true that overpopulation is happening or that increased population is a negative phenomenon.
The question is really whether or not two income households are unquestionably a good thing, to which the answer seems like a strong "No". Even without the birth rate issue I struggle to conceive of mechanism by which it isn't a vicious circle of more people entering the workforce, driving incomes down (and driving the cost of scarce resources like certain housing up), forcing more households to become two income to keep up with no obvious benefit for anyone but the people doing the employing.
Sure it is. Unless men start having babies, then women working and the birth rate consequently decreasing is a women-centric issue.
But you can still construe the problem both ways, is it women increasingly working outside the home that society takes as an unhealthy unquestionable good or men almost exclusively working outside the home which has been taken as good (or at least normal) since time immemorial.
And it's the same thing with the solution, if we come to the conclusion that somebody should take a smaller part in the workforce to help correct the birth rate and other problems two income households produce, the historical role of women in "creating" the problem doesn't imply they should be the ones to go.
This presumes zero-sum. That is, it presumes that this growth of the workforce does not affect the total productivity. If instead, more people working means more productivity, then part of that productivity can go to paying wages.
Whether this increase of productivity actually goes towards wages is difficult to say. I think that most of the recent productivity increase have been to the benefit of investors rather than labor.
People in all sorts of relationships adopt or otherwise have children. Folks die during childbirth. And while men cannot physically give birth, I've met plenty that enjoy child-rearing. If it were possible with my spouse and I, I'd happily work while he stays home. (He legally has to support me due to immigration laws). My ex stayed home while I worked, though to be fair, he was on disability. I do not have children (and have no plans to), but we have discussed adoption of an non-infant/toddler child (along with their siblings if they have any). While I see plenty of reasons for one of us to take parental leave, I don't see any reason why that would absolutely have to be me instead of him.
It may be worth to invest into all sorts of cultural programmes to make having kids cool again.
People were raised by their grandparents when I was young. Maybe the problem isn't within the nuclear family but with the idea that it's desirable to move in a different city to your parents, or even that it's an imposition to live with your parents while your children are young.
1. We get real scientific input on whether or not it has to be women that stay home with children. And research leans towards two parents spending time with children as being good, not just the mother figure. Also, a safe and secure environment with decently happy parents helps - which seriously doesn't mean women need to stay home unless by choice.
2. When science can figure out whether or not a parent needs to be at home all the time. Right now, it seems that the reason a parent needed to be home was because keeping house took a lot more time than it does now. Parents spend more quality time with children and more time in general than they did years ago, though. Science leans towards "quality" time being important (which is leanient) instead of a parent always being there.
3. When birth rates actually correlate with women working. There are lots of reasons birth rates decline. Not enough security, money, access to medical care, and so on will make rates decline as will one person in the partnership working too much to have the energy for sex. Poor women have had babies for centuries, though, and worked outside the home for those centuries at different times. All that is really needed to make sure the work isn't affecting birth rate is to have decent policies around this and make sure folks can afford safe child care.