1 00:00:09,640 --> 00:00:12,400 Speaker 1: Hello, Welcome to Stephano Mixed, the podcast that brings the 2 00:00:12,480 --> 00:00:15,760 Speaker 1: COVID global economy to you, and we're spending some time 3 00:00:15,800 --> 00:00:19,800 Speaker 1: in Japan this week. The world's third largest economy has 4 00:00:19,880 --> 00:00:23,760 Speaker 1: done much better than most containing the spread of the coronavirus, 5 00:00:24,200 --> 00:00:27,480 Speaker 1: but allows a job of protecting women workers from the effect. 6 00:00:28,320 --> 00:00:32,320 Speaker 1: It was Prime Minister Shinzo Abbe's signature initiative to boost 7 00:00:32,320 --> 00:00:35,680 Speaker 1: the economy by bringing more women into the workforce, and 8 00:00:35,760 --> 00:00:39,800 Speaker 1: he was eight years on finally making progress. But COVID 9 00:00:39,920 --> 00:00:42,560 Speaker 1: nineteen is turning the clock back for women in Japan, 10 00:00:43,240 --> 00:00:45,839 Speaker 1: just as it is in many other countries. We'll have 11 00:00:45,960 --> 00:00:49,800 Speaker 1: more from economy reporter Yuko Takeo in a few minutes, 12 00:00:50,400 --> 00:00:52,520 Speaker 1: but first I wanted to have a brief chat about 13 00:00:52,560 --> 00:00:57,480 Speaker 1: creative destruction, the bold economic experiment, which always sounds like 14 00:00:57,520 --> 00:00:59,920 Speaker 1: a brilliant idea just as long as it's happening to 15 00:01:00,040 --> 00:01:02,800 Speaker 1: someone else. Now, some of you will know the phrase 16 00:01:02,960 --> 00:01:08,000 Speaker 1: creative destruction was made popular by the Austrian economist Joseph Schumpeter. 17 00:01:08,840 --> 00:01:11,600 Speaker 1: The idea is that great things can come from disaster, 18 00:01:11,880 --> 00:01:14,400 Speaker 1: and government shouldn't stand in the way of that process 19 00:01:14,400 --> 00:01:17,600 Speaker 1: by rescuing firms that would otherwise go bust. As I say, 20 00:01:17,920 --> 00:01:21,440 Speaker 1: tends to be really popular with everyone except policymakers who 21 00:01:21,480 --> 00:01:24,560 Speaker 1: are right in the thick of a crisis and companies 22 00:01:24,560 --> 00:01:27,560 Speaker 1: that are themselves about to go bust. But it has 23 00:01:27,600 --> 00:01:30,880 Speaker 1: taken on particular resonance in the COVID crisis because we 24 00:01:31,040 --> 00:01:34,640 Speaker 1: just don't know how much of the economic destruction we're 25 00:01:34,640 --> 00:01:38,479 Speaker 1: seeing might be creative in the end, and how much 26 00:01:38,520 --> 00:01:42,000 Speaker 1: government should be doing all they can to avoid. US 27 00:01:42,040 --> 00:01:44,720 Speaker 1: Federal Reserve reporter Rich Miller has been thinking hard about this, 28 00:01:44,760 --> 00:01:47,319 Speaker 1: and he wrote an interesting piece for Bloomberg with France 29 00:01:47,360 --> 00:01:51,360 Speaker 1: economy reporter William Horrobin about the potential differences between the 30 00:01:51,480 --> 00:01:54,520 Speaker 1: US and Europe in this area. He's with me now 31 00:01:54,560 --> 00:02:07,000 Speaker 1: to discuss it with Eurozone economist may for Kusa. Welcome 32 00:02:07,120 --> 00:02:11,000 Speaker 1: both of you, and thanks for joining me. Rich. I 33 00:02:11,000 --> 00:02:14,680 Speaker 1: guess you should just explain the premise of your piece, 34 00:02:14,760 --> 00:02:19,160 Speaker 1: what are you setting out to talk about, and and 35 00:02:19,160 --> 00:02:21,400 Speaker 1: and maybe just give us a glimpse of the conclusions 36 00:02:21,440 --> 00:02:24,440 Speaker 1: that you drew. Sure, thank you for having me um. 37 00:02:25,240 --> 00:02:29,320 Speaker 1: The US traditionally has been seen as being better able 38 00:02:29,360 --> 00:02:33,639 Speaker 1: than Europe to re orient its economy after recessions it's 39 00:02:33,720 --> 00:02:36,240 Speaker 1: it's got two advantages. One on the labor market, it's 40 00:02:36,280 --> 00:02:40,400 Speaker 1: easier for companies here to fireworkers. And then two on 41 00:02:40,600 --> 00:02:44,519 Speaker 1: the sort of going bust. The bankruptcy courts here tend 42 00:02:44,560 --> 00:02:47,480 Speaker 1: to be friendlier to entrepreneurs, so it's easier to go 43 00:02:47,600 --> 00:02:50,720 Speaker 1: bust and then come back and start restart a new business. 44 00:02:51,240 --> 00:02:54,480 Speaker 1: So as a result, most economists see see the US 45 00:02:54,560 --> 00:02:57,760 Speaker 1: as having a leg up in the in the creative 46 00:02:57,800 --> 00:03:01,480 Speaker 1: descruption business eiso to speak. But as you as you 47 00:03:01,520 --> 00:03:04,960 Speaker 1: alluded to, you know, this crisis is uh, you know, 48 00:03:05,160 --> 00:03:08,120 Speaker 1: perhaps like no other in the side of the speed 49 00:03:08,160 --> 00:03:12,520 Speaker 1: and the severity and maybe even more important than tremendous uncertainty. 50 00:03:12,600 --> 00:03:17,040 Speaker 1: So we don't really know, uh, we never know completely. 51 00:03:17,080 --> 00:03:19,800 Speaker 1: But but even more so now it's hard to know 52 00:03:19,880 --> 00:03:24,120 Speaker 1: whether you know, if a firm goes bus now, is 53 00:03:24,160 --> 00:03:26,960 Speaker 1: it viable in the longer term and is it just 54 00:03:27,000 --> 00:03:29,720 Speaker 1: sort of going bust because we have a temporary collapse 55 00:03:29,760 --> 00:03:32,520 Speaker 1: and demand due to COVID And if you know six 56 00:03:32,560 --> 00:03:35,880 Speaker 1: months from now, you that Vietnamese restaurant on the corner 57 00:03:35,920 --> 00:03:39,040 Speaker 1: would be a viable enterprise once we get a vaccine. 58 00:03:39,440 --> 00:03:45,040 Speaker 1: And that's the conundrum that the policymakers are grappling with 59 00:03:46,480 --> 00:03:49,240 Speaker 1: do you think I mean, may just just turning to you, 60 00:03:49,520 --> 00:03:54,360 Speaker 1: would you recognize this contrast between US and Europe. I mean, 61 00:03:54,360 --> 00:03:56,920 Speaker 1: we definitely tend to think that it's easier to fail 62 00:03:57,440 --> 00:04:01,480 Speaker 1: and start again in the US. Um, you can go 63 00:04:01,600 --> 00:04:05,040 Speaker 1: bankrupt certainly more easily. Do people worry about that in 64 00:04:05,040 --> 00:04:07,160 Speaker 1: the current context, that it's not going to be easy 65 00:04:07,320 --> 00:04:10,440 Speaker 1: enough for people to fail and then reinvent themselves coming 66 00:04:10,440 --> 00:04:13,320 Speaker 1: out of this. Yes, I think that was one of 67 00:04:13,360 --> 00:04:18,600 Speaker 1: the reasons. I think the cost associated with recreating existing businesses, 68 00:04:18,760 --> 00:04:24,040 Speaker 1: existing job relations relationships and matching between the workers and 69 00:04:24,120 --> 00:04:29,680 Speaker 1: the vacancies is higher in Europe generally, so it made 70 00:04:29,720 --> 00:04:33,520 Speaker 1: more sense to try and protect those relationships and those 71 00:04:33,560 --> 00:04:36,760 Speaker 1: businesses as much as possible so that the this reset 72 00:04:36,839 --> 00:04:39,840 Speaker 1: up cost could be could be lowered and could be avoided. 73 00:04:40,240 --> 00:04:43,880 Speaker 1: There's more tape, there's this problem of restrictriation which is 74 00:04:43,920 --> 00:04:48,080 Speaker 1: not as smooth, and there are different attitudes from the 75 00:04:48,160 --> 00:04:50,880 Speaker 1: public as well on the role of government and how 76 00:04:50,960 --> 00:04:56,279 Speaker 1: much government should protect people against the economic risks and 77 00:04:56,440 --> 00:05:00,360 Speaker 1: economic hazards. So I think all that together meant that 78 00:05:00,360 --> 00:05:04,440 Speaker 1: there was both a lot of um, some economic sense 79 00:05:04,800 --> 00:05:07,840 Speaker 1: in prodicting, in protecting more, and a lot of political 80 00:05:08,200 --> 00:05:11,240 Speaker 1: wadingness to protect more. So yes, I think different, very 81 00:05:11,279 --> 00:05:15,880 Speaker 1: different setups could explain some of the different emergency reaction 82 00:05:16,040 --> 00:05:19,360 Speaker 1: to the crisis. But I guess I mean, rich of 83 00:05:19,480 --> 00:05:23,040 Speaker 1: you look at how the US has responded to this crisis. 84 00:05:23,080 --> 00:05:27,360 Speaker 1: They have in a sense tried to make the US 85 00:05:27,440 --> 00:05:29,680 Speaker 1: sort of less American in the sense of, you know, 86 00:05:29,760 --> 00:05:33,320 Speaker 1: try and reduce the number of bankruptcies and reduced this 87 00:05:33,560 --> 00:05:38,680 Speaker 1: kind of destruction, maybe out of fear that it's it's 88 00:05:38,760 --> 00:05:41,400 Speaker 1: not so creative. I mean, how how much of a 89 00:05:41,520 --> 00:05:44,560 Speaker 1: contrast is there and things like bankruptcy is relative to 90 00:05:44,640 --> 00:05:48,400 Speaker 1: pass recessions at least so far, um well, so far 91 00:05:48,600 --> 00:05:52,760 Speaker 1: on the bankruptcy for the bankruptcy filings are actually down 92 00:05:52,800 --> 00:05:55,839 Speaker 1: about eleven percent, you know, a year over year, and 93 00:05:56,360 --> 00:05:59,160 Speaker 1: and that is generally ascribed to you know, all the 94 00:05:59,279 --> 00:06:02,359 Speaker 1: programs and all the huge trillions of dollars that the 95 00:06:02,400 --> 00:06:05,560 Speaker 1: government is pumping in not only for consumers but but 96 00:06:05,560 --> 00:06:08,839 Speaker 1: but also to give so that they have money to 97 00:06:08,880 --> 00:06:12,000 Speaker 1: go and spend at these companies, but also for the companies. 98 00:06:12,279 --> 00:06:14,720 Speaker 1: Just so just to be clear, there's fewer companies than 99 00:06:14,839 --> 00:06:18,080 Speaker 1: normal I mean than a year ago, are actually going 100 00:06:18,160 --> 00:06:21,400 Speaker 1: bust even though we have this historic recession thus far. 101 00:06:21,520 --> 00:06:23,960 Speaker 1: I mean, you know, we have a big question mark 102 00:06:24,040 --> 00:06:28,000 Speaker 1: now over what comes next one when the stimulus that 103 00:06:28,800 --> 00:06:31,440 Speaker 1: this huge amount of stimulus has put into the economy. 104 00:06:31,880 --> 00:06:33,719 Speaker 1: You know, there's a big question mark here in the 105 00:06:33,720 --> 00:06:37,520 Speaker 1: States about how much of that, how much more the 106 00:06:37,640 --> 00:06:39,320 Speaker 1: US is going to put in. I guess there's also 107 00:06:39,320 --> 00:06:43,000 Speaker 1: a question in Europe to about that. But uh, and 108 00:06:43,040 --> 00:06:46,960 Speaker 1: there's a fear that you will see bankruptcy and even 109 00:06:47,000 --> 00:06:50,359 Speaker 1: in a normal recession, bankruptcy filings go up by about 110 00:06:50,400 --> 00:06:54,120 Speaker 1: fift that's in a normal recession. And the fear is 111 00:06:54,160 --> 00:06:57,080 Speaker 1: that if you had sort of let unbridled creative destruction go, 112 00:06:57,240 --> 00:07:00,080 Speaker 1: you you would have got clogged I mean really on 113 00:07:00,200 --> 00:07:06,320 Speaker 1: bankruptcy courts, and that would would also hurt the economy. Maybe. 114 00:07:06,520 --> 00:07:09,640 Speaker 1: How do you think that European governments are grappling with 115 00:07:09,680 --> 00:07:13,200 Speaker 1: this dilemma? It strikes me we're at a different stage 116 00:07:13,200 --> 00:07:16,160 Speaker 1: of the crisis now when it comes to the economic response. 117 00:07:16,200 --> 00:07:19,480 Speaker 1: You're not just trying to fill the whole. I think 118 00:07:19,520 --> 00:07:21,240 Speaker 1: we've talked about it in the past. You know, you 119 00:07:21,280 --> 00:07:24,000 Speaker 1: look at the hit to incomes that you think is 120 00:07:24,040 --> 00:07:26,080 Speaker 1: coming from the virus, and you're just trying to match 121 00:07:26,120 --> 00:07:28,920 Speaker 1: it to get money to households to try and keep 122 00:07:28,960 --> 00:07:32,120 Speaker 1: the economy afloat. But now are at a point where 123 00:07:32,120 --> 00:07:36,400 Speaker 1: you're trying to encourage growth and also perhaps encourage businesses 124 00:07:36,400 --> 00:07:40,040 Speaker 1: to adjust to a situation where we still have social distancing, 125 00:07:40,040 --> 00:07:44,400 Speaker 1: where we haven't got rid of the virus. Have we 126 00:07:44,560 --> 00:07:49,600 Speaker 1: seen that affect the programs that people are or how 127 00:07:49,680 --> 00:07:52,680 Speaker 1: long programs last? I mean, certainly in the UK recently 128 00:07:52,680 --> 00:07:55,800 Speaker 1: there's been an ongoing debate about how long that furlough scheme, 129 00:07:55,880 --> 00:07:58,800 Speaker 1: that John Protection scheme last, and actually it's supposed to 130 00:07:59,040 --> 00:08:03,080 Speaker 1: still expire in October, even though a lot of companies 131 00:08:03,120 --> 00:08:05,880 Speaker 1: feel that they will still need support from the government 132 00:08:05,920 --> 00:08:08,360 Speaker 1: in October and will probably have to lay people off 133 00:08:08,400 --> 00:08:10,320 Speaker 1: if it's not if their wages aren't going to be 134 00:08:10,360 --> 00:08:12,960 Speaker 1: paid by the government. How is that trade off being 135 00:08:13,000 --> 00:08:15,960 Speaker 1: managed in Europe? In other parts of Europe, yes, we 136 00:08:16,000 --> 00:08:20,360 Speaker 1: are starting to see some shifts from protection to something 137 00:08:20,440 --> 00:08:22,680 Speaker 1: that is maybe a bit closer to re allocation or 138 00:08:22,720 --> 00:08:26,280 Speaker 1: thinking about re allocation. So if you take the case 139 00:08:26,360 --> 00:08:29,680 Speaker 1: of hunts, for instance, the program the Fellow scheme has 140 00:08:29,720 --> 00:08:33,719 Speaker 1: been made a bit less generous for employers already and 141 00:08:34,240 --> 00:08:37,640 Speaker 1: starting from October it will be made less generous for 142 00:08:37,679 --> 00:08:42,240 Speaker 1: both employers and employees, so that employers are encouraged to 143 00:08:42,679 --> 00:08:45,839 Speaker 1: decide what they want to do with their workforce, either 144 00:08:46,200 --> 00:08:50,160 Speaker 1: they take them back or they actually decide that they 145 00:08:50,200 --> 00:08:52,600 Speaker 1: may not need as many people as they used as 146 00:08:53,000 --> 00:08:55,920 Speaker 1: much stuff as they had before. But also if the 147 00:08:56,080 --> 00:08:58,120 Speaker 1: program is less generous, and it used to be at 148 00:08:58,120 --> 00:09:01,120 Speaker 1: the moment, it's a bit more general that unemployed and benefits, 149 00:09:01,160 --> 00:09:04,520 Speaker 1: So if it becomes less generous than unemployment benefits, then 150 00:09:04,559 --> 00:09:08,079 Speaker 1: it creates an incentive for people to start looking like 151 00:09:08,280 --> 00:09:10,839 Speaker 1: becoming an employed and looking for a new job that 152 00:09:10,920 --> 00:09:14,200 Speaker 1: they may not have had with those very generous schemes. 153 00:09:14,600 --> 00:09:18,000 Speaker 1: So we are seeing that altho, clearly they are still 154 00:09:18,120 --> 00:09:22,360 Speaker 1: maintaining self safe some safeguards. So in France it will 155 00:09:22,400 --> 00:09:26,520 Speaker 1: be possible for employers to negotiate with unions and the 156 00:09:26,600 --> 00:09:29,760 Speaker 1: administration to have a longer term plan where they can 157 00:09:29,840 --> 00:09:32,600 Speaker 1: stay on this more generous scheme. But for that they 158 00:09:32,600 --> 00:09:35,120 Speaker 1: will have to have a plan on how they see 159 00:09:35,200 --> 00:09:38,559 Speaker 1: the development unemployment, how quickly they will bring back bring 160 00:09:38,559 --> 00:09:41,160 Speaker 1: back people. Do they need to ra structure, do they 161 00:09:41,160 --> 00:09:43,880 Speaker 1: train people for new jobs and things like that. So 162 00:09:44,320 --> 00:09:47,920 Speaker 1: this is a progressive, gradual shift. But that's going that's 163 00:09:47,920 --> 00:09:51,199 Speaker 1: going on in Spain, for instance, they are playing more 164 00:09:51,240 --> 00:09:54,600 Speaker 1: with the incentives. So if you are starting to bring 165 00:09:54,640 --> 00:09:57,920 Speaker 1: back more workers, then it's more like a wage. They're 166 00:09:57,960 --> 00:10:01,160 Speaker 1: thinking about wage subsidies, so going from retention schemes to 167 00:10:01,200 --> 00:10:04,280 Speaker 1: which subsidies. If you start bringing back more workers, then 168 00:10:04,480 --> 00:10:08,880 Speaker 1: you will pay less of um social contributions for the 169 00:10:09,160 --> 00:10:12,320 Speaker 1: entire workforce and things like that. So it's a it's 170 00:10:12,360 --> 00:10:15,160 Speaker 1: a it's a difficult balance they have to strike because 171 00:10:15,200 --> 00:10:17,839 Speaker 1: they have invested that bit a lot of money on 172 00:10:18,360 --> 00:10:20,520 Speaker 1: this and now they want to make sure that actually 173 00:10:20,600 --> 00:10:26,319 Speaker 1: they don't um lose everything by removing support. But they 174 00:10:26,360 --> 00:10:29,640 Speaker 1: are playing by the year and they are moving step 175 00:10:29,679 --> 00:10:34,520 Speaker 1: based step depending on the evolution of the situation. But 176 00:10:34,600 --> 00:10:37,120 Speaker 1: how do you think, I mean, overall, do you think 177 00:10:37,160 --> 00:10:39,240 Speaker 1: they're still at the stage where they're going to air 178 00:10:39,360 --> 00:10:43,240 Speaker 1: on the side of protecting too many jobs or you know, 179 00:10:43,240 --> 00:10:45,520 Speaker 1: if you're looking down the track and thinking what it 180 00:10:45,559 --> 00:10:50,280 Speaker 1: could be twelve months that the economy is operating seriously 181 00:10:50,360 --> 00:10:53,280 Speaker 1: blow potential and a lot of these businesses are not 182 00:10:53,920 --> 00:10:59,120 Speaker 1: viable in that environment where we still have COVID nineteen. 183 00:11:00,080 --> 00:11:01,760 Speaker 1: Do you think they should still air on the side 184 00:11:01,800 --> 00:11:04,200 Speaker 1: of protecting jobs or should they be thinking a bit 185 00:11:04,240 --> 00:11:07,880 Speaker 1: more about how to help people reinvent themselves. I think 186 00:11:07,920 --> 00:11:10,920 Speaker 1: they will. They are clearly waiting for the summer to see. 187 00:11:11,360 --> 00:11:13,880 Speaker 1: Uh and the tourism question is is a big one 188 00:11:14,000 --> 00:11:15,839 Speaker 1: and it's a big unknown, So I think they are 189 00:11:15,840 --> 00:11:19,920 Speaker 1: really waiting to see. These schemes are expensive. I think 190 00:11:20,160 --> 00:11:23,160 Speaker 1: they will probably keep a lot of protection initially, especially 191 00:11:23,160 --> 00:11:26,360 Speaker 1: if they have some hope that those jobs will become 192 00:11:26,480 --> 00:11:29,840 Speaker 1: vailable in the near future. UM it was the main 193 00:11:29,920 --> 00:11:32,840 Speaker 1: limit to that, I think in their view will be 194 00:11:32,880 --> 00:11:39,680 Speaker 1: the cost rather than the risk of impedding creative creative destruction. 195 00:11:40,240 --> 00:11:44,480 Speaker 1: But I think they will air on the side of custion. Now, Rich, 196 00:11:44,520 --> 00:11:46,280 Speaker 1: I'm going to give the give the last word to 197 00:11:46,280 --> 00:11:48,840 Speaker 1: you because I know how many, many many years that 198 00:11:48,880 --> 00:11:51,800 Speaker 1: you've been covering the US economy. Thank you very much, 199 00:11:51,880 --> 00:11:57,920 Speaker 1: thinking thin and I wonder, I mean it was it's 200 00:11:57,960 --> 00:12:02,040 Speaker 1: been such an extraordinary amount of support coming out of 201 00:12:02,040 --> 00:12:05,040 Speaker 1: the federal government, a lot more than we had in 202 00:12:05,040 --> 00:12:07,920 Speaker 1: the global financial crisis, which itself was considered to be 203 00:12:08,000 --> 00:12:12,760 Speaker 1: a pretty big US fiscal stimulus. Do you do you 204 00:12:12,840 --> 00:12:18,800 Speaker 1: see that the support for that evaporating quite soon? Do 205 00:12:18,840 --> 00:12:20,360 Speaker 1: you see it as a temporary thing. Do you think 206 00:12:20,400 --> 00:12:22,640 Speaker 1: we are going to see America sort of shift back 207 00:12:22,640 --> 00:12:26,160 Speaker 1: to a more sort of an ethos that favors creative 208 00:12:26,200 --> 00:12:30,680 Speaker 1: destruction or will we see that same kind of balance 209 00:12:30,760 --> 00:12:33,880 Speaker 1: that maybe's talking about people actually wanting to protect rather 210 00:12:33,960 --> 00:12:37,960 Speaker 1: than have companies go to the war. Yeah, difficult question, 211 00:12:38,440 --> 00:12:40,760 Speaker 1: and obviously with an election coming up that would also 212 00:12:41,520 --> 00:12:47,800 Speaker 1: affect it. But um, I think there would There would 213 00:12:47,800 --> 00:12:50,640 Speaker 1: still probably be more I think in the short term, 214 00:12:50,640 --> 00:12:52,319 Speaker 1: and I think maybe is rightly that they will the 215 00:12:52,360 --> 00:12:55,400 Speaker 1: emphasis will be on protection, though maybe perhaps in the 216 00:12:55,520 --> 00:12:59,960 Speaker 1: in the in the longer term it might be more 217 00:13:00,040 --> 00:13:04,880 Speaker 1: on reinvention. But there's a lot of moving parts going on, 218 00:13:05,040 --> 00:13:10,040 Speaker 1: and the US is both Republicans and Democrats are moving 219 00:13:10,720 --> 00:13:13,240 Speaker 1: arguably towards in a little bit more of the direction 220 00:13:13,360 --> 00:13:18,559 Speaker 1: of industrial policy type, and that is not necessarily creative destruction. 221 00:13:18,640 --> 00:13:23,160 Speaker 1: That's government sort of playing a bigger hand. Uh So, 222 00:13:24,000 --> 00:13:26,000 Speaker 1: But I would I would think that that the US 223 00:13:26,080 --> 00:13:29,840 Speaker 1: ethos is still towards more reinvention than protection, and that 224 00:13:29,880 --> 00:13:34,000 Speaker 1: would probably you know, um went out so to speak, 225 00:13:34,040 --> 00:13:37,280 Speaker 1: in the longer run, I guess one of us. So 226 00:13:37,440 --> 00:13:40,680 Speaker 1: I was just thinking one of the other question one 227 00:13:40,760 --> 00:13:45,720 Speaker 1: might have is whether the US has gone a bit soft. 228 00:13:46,040 --> 00:13:49,120 Speaker 1: You know, we've heard a lot of talk about big 229 00:13:49,200 --> 00:13:54,320 Speaker 1: tech giants kind of dominating certain companies and they're being 230 00:13:54,360 --> 00:13:57,640 Speaker 1: a lot less competition and maybe less creative destruction in 231 00:13:57,679 --> 00:14:02,000 Speaker 1: those sectors. We've there's the the mobility numbers have gone down, 232 00:14:02,120 --> 00:14:05,760 Speaker 1: so people seem to be less willing now to change 233 00:14:06,320 --> 00:14:08,840 Speaker 1: to move across the country for a job as maybe 234 00:14:08,920 --> 00:14:13,280 Speaker 1: they used to in the pose used to associate that 235 00:14:13,360 --> 00:14:17,880 Speaker 1: with American workers. So is that is there is there 236 00:14:17,920 --> 00:14:20,000 Speaker 1: an element of that rich that maybe it was never 237 00:14:20,680 --> 00:14:25,040 Speaker 1: was not really as creatively destructive environment in the US 238 00:14:25,320 --> 00:14:27,840 Speaker 1: and hasn't been for quite a long time. Well, I 239 00:14:27,880 --> 00:14:30,080 Speaker 1: think that there's definitely an element, and that that they 240 00:14:30,120 --> 00:14:34,440 Speaker 1: know that the differences between the two regions maybe maybe less. 241 00:14:35,080 --> 00:14:40,920 Speaker 1: Then it's sort of commonly portrayed. And if the Democrats win, 242 00:14:41,200 --> 00:14:44,920 Speaker 1: you'll you'll have you know, an emphasis more on worker rights, 243 00:14:45,000 --> 00:14:48,840 Speaker 1: more on union power, which will tend to look a 244 00:14:48,840 --> 00:14:54,000 Speaker 1: little bit more like the European model and not anywhere 245 00:14:54,040 --> 00:14:57,080 Speaker 1: near like that, but it would be moving in that direction. 246 00:14:58,720 --> 00:15:03,520 Speaker 1: So the gaps between m hm us and Europe narrowing, 247 00:15:03,520 --> 00:15:06,560 Speaker 1: and not just on this podcast. But thank you very much, 248 00:15:07,480 --> 00:15:19,440 Speaker 1: Rich Miller and Vakuza. Thank you, Thank you m h 249 00:15:20,400 --> 00:15:23,440 Speaker 1: Now that story I promised you. From Japan, here's economy 250 00:15:23,480 --> 00:15:27,600 Speaker 1: reporter Yuko Takeo speaking from a special location in Tokyo. 251 00:15:36,560 --> 00:15:39,360 Speaker 1: COVID nineteen has turned two thousand and twenty into a 252 00:15:39,440 --> 00:15:44,680 Speaker 1: year postperments, and Japan is no exception. I'm here outside 253 00:15:44,680 --> 00:15:48,160 Speaker 1: Tokyo's Olympic Stadium, where thousands of visitors from around the 254 00:15:48,160 --> 00:15:51,240 Speaker 1: world should have been enjoying the now postponed games and 255 00:15:51,320 --> 00:15:55,880 Speaker 1: cheering on the country's medal hopes. But even without the virus, 256 00:15:56,080 --> 00:15:59,240 Speaker 1: there's one goal Japan's male dominated society never looked like 257 00:15:59,320 --> 00:16:08,040 Speaker 1: achieving this year, filling leadership positions for women. Back in February, 258 00:16:08,160 --> 00:16:11,240 Speaker 1: I've met fifty year old aspiring politician Multiple Missing at 259 00:16:11,280 --> 00:16:14,640 Speaker 1: an event in the area of Customer Gazipi, the heartland 260 00:16:14,640 --> 00:16:17,920 Speaker 1: of Japanese politics, whose name roughly translates to the gated 261 00:16:18,000 --> 00:16:23,400 Speaker 1: miss organized by the Academy for Gender Parity. Two female 262 00:16:23,400 --> 00:16:25,520 Speaker 1: and Peace were speaking there about some of the ups 263 00:16:25,560 --> 00:16:27,640 Speaker 1: and downs they faced in the high stressed world of 264 00:16:27,720 --> 00:16:32,000 Speaker 1: Japanese politics. Later, Momuticle also taught me about some of 265 00:16:32,040 --> 00:16:40,000 Speaker 1: the gender disparities that possist. If you're a man going 266 00:16:40,040 --> 00:16:43,240 Speaker 1: into politics, often there's a positively you go kind of 267 00:16:43,280 --> 00:16:46,240 Speaker 1: push for them. Their wife often helps them, and the 268 00:16:46,320 --> 00:16:49,200 Speaker 1: manpower at least doubles. But when a woman like me 269 00:16:49,320 --> 00:16:53,920 Speaker 1: tries to do the same thing, everyone says, don't do it. 270 00:16:54,600 --> 00:16:57,960 Speaker 1: Unless political parties decide they want to increase the number 271 00:16:58,000 --> 00:17:13,280 Speaker 1: of women, it doesn't really. According to the World Economic 272 00:17:13,320 --> 00:17:16,520 Speaker 1: Forum's latest rankings of gender based disparity in things like 273 00:17:16,600 --> 00:17:22,040 Speaker 1: economic participation, health, education, and political empowerment, Japan ranks a 274 00:17:22,119 --> 00:17:25,200 Speaker 1: hundred and twenty first in the world. That's below the 275 00:17:25,280 --> 00:17:29,760 Speaker 1: United Arab Emirates and Sierra Leone. Only ten percent of 276 00:17:29,840 --> 00:17:32,520 Speaker 1: Lower House MPs are women unless than one percent of 277 00:17:32,560 --> 00:17:35,280 Speaker 1: CEO is a companies listed on Japan's stock exchange. Our 278 00:17:35,320 --> 00:17:39,560 Speaker 1: female that hasn't stopped prime ministicians areb from ruling the 279 00:17:39,680 --> 00:17:44,120 Speaker 1: government's progress, especially in the jobs market. The women's labor 280 00:17:44,160 --> 00:17:49,080 Speaker 1: participation rate has dramatically increased under abets tenure. Still, the 281 00:17:49,119 --> 00:17:52,199 Speaker 1: coronavirus has a wound. Some of these games, revealing the 282 00:17:52,240 --> 00:17:56,679 Speaker 1: fragility of progress. In April, the number of working women 283 00:17:56,680 --> 00:17:58,520 Speaker 1: fell for the first time in more than eight years. 284 00:17:59,440 --> 00:18:02,439 Speaker 1: This is an only a japan story. Around the world, 285 00:18:02,760 --> 00:18:05,320 Speaker 1: the pandemic has hit women harder because they are more 286 00:18:05,359 --> 00:18:08,880 Speaker 1: likely to work part time or beyond short and contracts, 287 00:18:09,480 --> 00:18:12,280 Speaker 1: and they often work in sectors like tourism and hospitality, 288 00:18:12,480 --> 00:18:16,920 Speaker 1: which have been worse out back in Marge I talked 289 00:18:16,960 --> 00:18:19,720 Speaker 1: forty eight year old Nick Orson, one of the more 290 00:18:19,760 --> 00:18:22,919 Speaker 1: than three million women who joined the workforce under Abbey's tenure. 291 00:18:23,760 --> 00:18:26,280 Speaker 1: She started working part time at a local bakery two 292 00:18:26,359 --> 00:18:32,240 Speaker 1: years ago after her youngest sons started school can keep. 293 00:18:33,359 --> 00:18:36,439 Speaker 1: I thought it would give me a change of scenery 294 00:18:36,640 --> 00:18:40,120 Speaker 1: and we would need the money going ahead. My eldest 295 00:18:40,400 --> 00:18:43,159 Speaker 1: is starting middle school, so we would need money for 296 00:18:43,200 --> 00:18:47,919 Speaker 1: a cram school. There's fees are expensive, so our outgoings 297 00:18:48,000 --> 00:18:51,640 Speaker 1: are going to get larger. My younger son is doing 298 00:18:51,680 --> 00:18:56,359 Speaker 1: more extra curricular activities as well, and these extra expenses 299 00:18:56,400 --> 00:18:58,359 Speaker 1: of the two kids are a big way on our 300 00:18:58,440 --> 00:19:03,520 Speaker 1: household budget, and the ro looked at what's going play. 301 00:19:04,280 --> 00:19:07,119 Speaker 1: Fast forward two months and the Yokohama resident is no 302 00:19:07,160 --> 00:19:10,920 Speaker 1: longer an example of progress under Albe. Instead, she's one 303 00:19:10,920 --> 00:19:13,240 Speaker 1: of more than three hundred thousand women who lost their 304 00:19:13,320 --> 00:19:17,040 Speaker 1: jobs in April and May. That was during Japan's state 305 00:19:17,040 --> 00:19:19,760 Speaker 1: of emergency, when people were urged to stay home and 306 00:19:19,800 --> 00:19:24,360 Speaker 1: work from home as much as possible. When does things 307 00:19:24,400 --> 00:19:28,480 Speaker 1: of the emergency was announced that bakery was temporarily closed. 308 00:19:28,880 --> 00:19:32,120 Speaker 1: We were supposed to go back once the emergency was lifted, 309 00:19:32,880 --> 00:19:37,119 Speaker 1: but without any revenue, the bakery, like many others, wasn't 310 00:19:37,160 --> 00:19:43,000 Speaker 1: able to open again without a downsizing. The bakery disclosure 311 00:19:43,080 --> 00:19:45,560 Speaker 1: cave as a shock, but really goes looking for new 312 00:19:45,600 --> 00:19:48,080 Speaker 1: part time work, and she's happy that her two sons 313 00:19:48,119 --> 00:19:51,760 Speaker 1: can now go to school again. When the pandemic prompted 314 00:19:51,880 --> 00:19:54,880 Speaker 1: school closures, the building of more childcare fell on women 315 00:19:54,960 --> 00:19:58,840 Speaker 1: more than men. All that mirror developments in other nations 316 00:19:58,920 --> 00:20:02,359 Speaker 1: across the world. Women in Japan were already carrying a 317 00:20:02,440 --> 00:20:08,240 Speaker 1: higher burden than in other advanced For colomies one couples 318 00:20:08,280 --> 00:20:11,879 Speaker 1: with young children, Japanese wife's spent six times the amount 319 00:20:11,880 --> 00:20:14,360 Speaker 1: of hours in child care and health work than the husband's. 320 00:20:15,119 --> 00:20:18,000 Speaker 1: In the US, France and Germany, the ratio is roughly 321 00:20:18,040 --> 00:20:21,880 Speaker 1: only double. Nichols says she's happy to have been able 322 00:20:21,920 --> 00:20:24,360 Speaker 1: to watch her son's grow up, but she's also had 323 00:20:24,400 --> 00:20:26,919 Speaker 1: to basically be a single parent for years when her 324 00:20:27,000 --> 00:20:30,520 Speaker 1: husband's job first took him to Shanghai than another prefecture 325 00:20:30,520 --> 00:20:37,680 Speaker 1: in Japan. Was toughest. When I like to say, my 326 00:20:37,760 --> 00:20:40,560 Speaker 1: parents don't live that close, so there was no one 327 00:20:40,600 --> 00:20:44,280 Speaker 1: I could rely on. The first year after my husband 328 00:20:44,320 --> 00:20:48,280 Speaker 1: moved to China, I was really sick and my youngest 329 00:20:48,359 --> 00:20:51,760 Speaker 1: was about one year old. That was the toughest time, 330 00:20:52,080 --> 00:20:55,120 Speaker 1: and it was difficult that my husband wasn't there when 331 00:20:55,160 --> 00:21:03,920 Speaker 1: I was ill, but in a different part of Japan. 332 00:21:04,280 --> 00:21:07,160 Speaker 1: Multiple the women I've met at the politicians event back 333 00:21:07,200 --> 00:21:10,120 Speaker 1: in February, it's been trying to represent people like Rumical. 334 00:21:11,320 --> 00:21:15,120 Speaker 1: That's a tough route given Japan's female representation in parliament 335 00:21:15,160 --> 00:21:17,400 Speaker 1: rights a hundred and thirty five in the world according 336 00:21:17,400 --> 00:21:21,320 Speaker 1: to the World Economic Forum. Multiple built her career in 337 00:21:21,359 --> 00:21:23,880 Speaker 1: the field of aerospace, and she beams when she talks 338 00:21:23,880 --> 00:21:28,439 Speaker 1: about space. She worked at Jackson, Japan's version of NASA 339 00:21:28,640 --> 00:21:31,480 Speaker 1: for nearly three decades, and it's planning on running for 340 00:21:31,520 --> 00:21:35,280 Speaker 1: the next lower House elections. But as a working mother 341 00:21:35,280 --> 00:21:38,360 Speaker 1: who has no previous choice of politics, she says it's 342 00:21:38,400 --> 00:21:43,040 Speaker 1: not an easy ride. Yeah. In Japan, it's difficult to 343 00:21:43,160 --> 00:21:46,720 Speaker 1: enter politics unless you have a political family, fame, or money. 344 00:21:47,560 --> 00:21:50,679 Speaker 1: Right now, it's mostly men in this world, so unless 345 00:21:50,720 --> 00:21:54,920 Speaker 1: there's a major support, you can't step in. Another challenge 346 00:21:55,160 --> 00:21:59,439 Speaker 1: is balancing it with everything else all the moments. I'm 347 00:21:59,520 --> 00:22:02,600 Speaker 1: running for office despite being a single mother, so of 348 00:22:02,640 --> 00:22:05,800 Speaker 1: course people have a lot of opinions. I've worried a 349 00:22:05,800 --> 00:22:08,879 Speaker 1: lot over that. But my conclusion is that I can't 350 00:22:08,880 --> 00:22:10,959 Speaker 1: bear to hand over Japan as it is to my 351 00:22:11,040 --> 00:22:14,919 Speaker 1: children and their generation. I can't stand it when I 352 00:22:15,000 --> 00:22:17,760 Speaker 1: pass it over to the next generation. I want to 353 00:22:17,760 --> 00:22:20,640 Speaker 1: be able to do it with confidence. I don't want 354 00:22:20,680 --> 00:22:23,399 Speaker 1: to say I'm sorry, Japan is in this state. Please 355 00:22:23,400 --> 00:22:27,439 Speaker 1: do your best with it. Took your governor Urico procle 356 00:22:27,640 --> 00:22:30,280 Speaker 1: one re election earlier this month in a race which 357 00:22:30,400 --> 00:22:34,080 Speaker 1: faced twenty one challenges, but while she has gone it 358 00:22:34,119 --> 00:22:36,639 Speaker 1: praised for her faster response to the pandemic than the 359 00:22:36,680 --> 00:22:40,280 Speaker 1: other administration. She's one of only two female leaders in 360 00:22:40,359 --> 00:22:44,800 Speaker 1: Japan's forty seven prefectures. Caffee Matson, vice chair of Golden 361 00:22:44,880 --> 00:22:48,000 Speaker 1: SAX Japan, coined the term women no Mix back in 362 00:22:50,280 --> 00:22:52,919 Speaker 1: she has normally. The commic argument to boost the female 363 00:22:52,920 --> 00:22:57,560 Speaker 1: representation in both the public and corporates is so based 364 00:22:57,560 --> 00:23:01,960 Speaker 1: on our analysis, if you could close Japan's gender employment 365 00:23:02,040 --> 00:23:06,000 Speaker 1: gap and encourage were women to work full time as 366 00:23:06,000 --> 00:23:08,359 Speaker 1: well as the part time, you could live Japanese GDP 367 00:23:08,440 --> 00:23:13,840 Speaker 1: by as much as fifteent, which is huge. Aspiring politician 368 00:23:14,000 --> 00:23:16,879 Speaker 1: Motorco argues that more women in parliament will also have 369 00:23:16,960 --> 00:23:20,480 Speaker 1: a host of positives policy making that's more in hune 370 00:23:20,480 --> 00:23:25,320 Speaker 1: with normal people's lives, better representation of women's concerns, and 371 00:23:25,440 --> 00:23:33,920 Speaker 1: more innovation through diversity. What decides the core of Japan's 372 00:23:33,960 --> 00:23:38,600 Speaker 1: future is politics. I finally realized this at nearly fifty, 373 00:23:38,920 --> 00:23:43,080 Speaker 1: after I'd lived for five decades. But if I'd realized 374 00:23:43,080 --> 00:23:46,040 Speaker 1: this when I was younger, maybe I would have taken 375 00:23:46,040 --> 00:24:06,520 Speaker 1: that past sonn probl B News. I'm Muko Teco. Thanks 376 00:24:06,560 --> 00:24:08,760 Speaker 1: for listening to Stephanomics. We'll be back next week with 377 00:24:08,800 --> 00:24:12,960 Speaker 1: more on how COVID nineteen is transforming the global economy. 378 00:24:13,240 --> 00:24:16,160 Speaker 1: Remember you can always find us on the Bloomberg terminal, website, 379 00:24:16,200 --> 00:24:18,760 Speaker 1: app or wherever you get your podcasts. And for more 380 00:24:18,800 --> 00:24:23,320 Speaker 1: news and analysis from Bloomberg Economics, follow at Economics on Twitter. 381 00:24:24,000 --> 00:24:27,000 Speaker 1: This episode was produced by Magnus Hendrickson, with special thanks 382 00:24:27,040 --> 00:24:31,160 Speaker 1: to Rich Miller, Mava Kusin, William Horrbin, and Paul Jackson 383 00:24:31,160 --> 00:24:34,840 Speaker 1: in Tokyo. Lucy Meekin is the acting executive producer of 384 00:24:34,840 --> 00:24:38,399 Speaker 1: Stephanomics and the head of Bloomberg podcast is Francesca Levy.