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Japan Economy: Daycare Crisis Is Forcing Moms To Stay At Home

Working women are central to boosting Japan's economy but without proper access to daycare, their hands are tied.

Many Canadian parents understand the challenge (and stress) of finding affordable care for their children. But nothing compares to the daycare crisis in Japan. In fact, the nation’s economic trajectory depends on better access to child care -- or at least allowing moms to work outside the home, if they want to.

Japan simply doesn't have enough daycare spaces to meet the demand of working parents. As a result, finding a daycare in this country can be an incredibly frustrating process. Most parents have to visit 20 to 40 daycares before they find one that will take their child.

Initial reports had the number of children on daycare waiting lists at 23,167 but the BBC reported in March that a staggering 72,000 Japanese children are on waiting lists across the country.

The inability to access child care has led to many women leaving work. In fact, about 70 per cent of Japanese women abandon their careers after having their first child. And therein lies the problem for Japan's economy.


In 2013, when Japan’s Prime Minister Shinzo Abe faced a stalled economy, an aging population and massive national debt, he decided that women were the answer to a growth strategy.

It’s important to note that this wasn’t an exercise in equality. It was a business decision.

Encouraging more women to join the workforce can have a positive effect on the economy, according to Kathy Matsui, chief Japan strategist at Goldman Sachs. In 1999, she coined the term 'womenomics,' which Abe has espoused.

Women exchange tips for the best months to have children to optimize daycare potential.

Matsui told Bloomberg that achieving parity in the workplace could increase Japan's national GDP by 13 to 14 per cent.

“As a result of a shrinking and greying workforce, acute labour shortages and a recovering economy, a growing number of policy makers and citizens are finally becoming convinced that gender diversity in the workplace is no longer an option, rather, it is an imperative,” she wrote in a report. “Japan can no longer afford not to leverage half its population.”

Since implementing ‘womenomics' three years ago, Japan has seen growth. The country moved up four spots on the World Economic Forum’s Gender Gap Report and now sits at 101 out of 145 countries.

Since Abe took office, over a million women have joined the workforce. In 2010, only 48.5 per cent of women worked outside the home, mostly in clerical positions. Four years later, 63 per cent of Japanese women were in the workforce, which is still far below men at 81 per cent.

What's holding up progress?

Abe’s ambitious plan, which included women holding 30 per cent of leadership positions by 2020, has hit some snags: a sexist corporate environment, a ‘bamboo’ ceiling (think glass ceiling but more difficult to break through), confusing paternity leave standards and an unfair distribution of housework to name a few. But the greatest sticking point has been daycare.

The increase in child care facilities has correlated to but not matched the growing number of women joining the workforce in Japan. Bloomberg reported that as of last April, 2.47 million daycare places were available for pre-schoolers, which is an increase of 140,000 from the previous year. But it’s still not enough.

Fully subsidized daycares are expensive for local governments to open up. The centres have large overhead costs (paying workers, maintaining the facility, etc) and a low profit margin.

“If you can't work, you can't live. But without daycare you can't work -- and you won't want to have kids.”

Private centres can generate more profit by offloading costs to parents, but expansion regulations are strict. One such regulation is that private companies can't open more than one facility.

"Subsidies for state-sponsored daycare skew demand while leaving the government unable to afford expansion. Meanwhile, regulations restrict the ability of private-sector daycare operators to build new centers," the Wall Street Journal reported.

Not enough facilities is only part of the problem. Daycare workers on average make less than $2,000 a month, which is under the national average income. There are over a million certified child care workers in Japan but the combination of low pay with the long hours (work hours can routinely run over 12 hours in Japan’s corporate culture), de-incentivizes them to take it up as a career.

The lack of daycares centres doesn't help another problem facing Japan: a declining birth-rate.

“If you can't work, you can't live. But without daycare you can't work -- and you won't want to have kids,” one mother told Reuters.

Next steps

With an election of the House of Councillors later this summer in Japan, daycare has become a central issue. And the government is looking for solutions.

In 2010, the waiting lists had 1,552 children, four years later the waiting list was down to 20. Her overhaul of the system included increased spending on child care (Hayashi doubled spending to $160 million and opened 175 daycares in four years). She also created programs to encourage private providers to open daycares and installed ‘nursery concierges’ who can field questions and provide recommendations to searching parents. Prime Minister Abe is now looking to implement the 'Yokohama method' across the country.

Abe’s Liberal Democratic Party has said it will make supporting child care systems part of its upcoming campaign platform by pledging to increase the amount of available spots by 400,000 by 2018 and cut the waiting list to zero.

Another of Abe’s proposed solutions is to loosen immigration policy to allow foreign workers to take care of children and elderly family.

The opposition, the Democratic Party has proposed a bill to increase the wages of daycare staff.

In the meantime, between chatrooms where women exchange tips for the best months to have children to optimize daycare potential to navigating a culture that unfairly divides housework, it remains a vicious cycle that leaves many women exhausted.

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