WEBVTT - Can 'Creative Destruction' Work During a Pandemic? 0:00:09.640 --> 0:00:12.400 Hello, Welcome to Stephano Mixed, the podcast that brings the 0:00:12.480 --> 0:00:15.760 COVID global economy to you, and we're spending some time 0:00:15.800 --> 0:00:19.800 in Japan this week. The world's third largest economy has 0:00:19.880 --> 0:00:23.760 done much better than most containing the spread of the coronavirus, 0:00:24.200 --> 0:00:27.480 but allows a job of protecting women workers from the effect. 0:00:28.320 --> 0:00:32.320 It was Prime Minister Shinzo Abbe's signature initiative to boost 0:00:32.320 --> 0:00:35.680 the economy by bringing more women into the workforce, and 0:00:35.760 --> 0:00:39.800 he was eight years on finally making progress. But COVID 0:00:39.920 --> 0:00:42.560 nineteen is turning the clock back for women in Japan, 0:00:43.240 --> 0:00:45.839 just as it is in many other countries. We'll have 0:00:45.960 --> 0:00:49.800 more from economy reporter Yuko Takeo in a few minutes, 0:00:50.400 --> 0:00:52.520 but first I wanted to have a brief chat about 0:00:52.560 --> 0:00:57.480 creative destruction, the bold economic experiment, which always sounds like 0:00:57.520 --> 0:00:59.920 a brilliant idea just as long as it's happening to 0:01:00.040 --> 0:01:02.800 someone else. Now, some of you will know the phrase 0:01:02.960 --> 0:01:08.000 creative destruction was made popular by the Austrian economist Joseph Schumpeter. 0:01:08.840 --> 0:01:11.600 The idea is that great things can come from disaster, 0:01:11.880 --> 0:01:14.400 and government shouldn't stand in the way of that process 0:01:14.400 --> 0:01:17.600 by rescuing firms that would otherwise go bust. As I say, 0:01:17.920 --> 0:01:21.440 tends to be really popular with everyone except policymakers who 0:01:21.480 --> 0:01:24.560 are right in the thick of a crisis and companies 0:01:24.560 --> 0:01:27.560 that are themselves about to go bust. But it has 0:01:27.600 --> 0:01:30.880 taken on particular resonance in the COVID crisis because we 0:01:31.040 --> 0:01:34.640 just don't know how much of the economic destruction we're 0:01:34.640 --> 0:01:38.479 seeing might be creative in the end, and how much 0:01:38.520 --> 0:01:42.000 government should be doing all they can to avoid. US 0:01:42.040 --> 0:01:44.720 Federal Reserve reporter Rich Miller has been thinking hard about this, 0:01:44.760 --> 0:01:47.319 and he wrote an interesting piece for Bloomberg with France 0:01:47.360 --> 0:01:51.360 economy reporter William Horrobin about the potential differences between the 0:01:51.480 --> 0:01:54.520 US and Europe in this area. He's with me now 0:01:54.560 --> 0:02:07.000 to discuss it with Eurozone economist may for Kusa. Welcome 0:02:07.120 --> 0:02:11.000 both of you, and thanks for joining me. Rich. I 0:02:11.000 --> 0:02:14.680 guess you should just explain the premise of your piece, 0:02:14.760 --> 0:02:19.160 what are you setting out to talk about, and and 0:02:19.160 --> 0:02:21.400 and maybe just give us a glimpse of the conclusions 0:02:21.440 --> 0:02:24.440 that you drew. Sure, thank you for having me um. 0:02:25.240 --> 0:02:29.320 The US traditionally has been seen as being better able 0:02:29.360 --> 0:02:33.639 than Europe to re orient its economy after recessions it's 0:02:33.720 --> 0:02:36.240 it's got two advantages. One on the labor market, it's 0:02:36.280 --> 0:02:40.400 easier for companies here to fireworkers. And then two on 0:02:40.600 --> 0:02:44.519 the sort of going bust. The bankruptcy courts here tend 0:02:44.560 --> 0:02:47.480 to be friendlier to entrepreneurs, so it's easier to go 0:02:47.600 --> 0:02:50.720 bust and then come back and start restart a new business. 0:02:51.240 --> 0:02:54.480 So as a result, most economists see see the US 0:02:54.560 --> 0:02:57.760 as having a leg up in the in the creative 0:02:57.800 --> 0:03:01.480 descruption business eiso to speak. But as you as you 0:03:01.520 --> 0:03:04.960 alluded to, you know, this crisis is uh, you know, 0:03:05.160 --> 0:03:08.120 perhaps like no other in the side of the speed 0:03:08.160 --> 0:03:12.520 and the severity and maybe even more important than tremendous uncertainty. 0:03:12.600 --> 0:03:17.040 So we don't really know, uh, we never know completely. 0:03:17.080 --> 0:03:19.800 But but even more so now it's hard to know 0:03:19.880 --> 0:03:24.120 whether you know, if a firm goes bus now, is 0:03:24.160 --> 0:03:26.960 it viable in the longer term and is it just 0:03:27.000 --> 0:03:29.720 sort of going bust because we have a temporary collapse 0:03:29.760 --> 0:03:32.520 and demand due to COVID And if you know six 0:03:32.560 --> 0:03:35.880 months from now, you that Vietnamese restaurant on the corner 0:03:35.920 --> 0:03:39.040 would be a viable enterprise once we get a vaccine. 0:03:39.440 --> 0:03:45.040 And that's the conundrum that the policymakers are grappling with 0:03:46.480 --> 0:03:49.240 do you think I mean, may just just turning to you, 0:03:49.520 --> 0:03:54.360 would you recognize this contrast between US and Europe. I mean, 0:03:54.360 --> 0:03:56.920 we definitely tend to think that it's easier to fail 0:03:57.440 --> 0:04:01.480 and start again in the US. Um, you can go 0:04:01.600 --> 0:04:05.040 bankrupt certainly more easily. Do people worry about that in 0:04:05.040 --> 0:04:07.160 the current context, that it's not going to be easy 0:04:07.320 --> 0:04:10.440 enough for people to fail and then reinvent themselves coming 0:04:10.440 --> 0:04:13.320 out of this. Yes, I think that was one of 0:04:13.360 --> 0:04:18.600 the reasons. I think the cost associated with recreating existing businesses, 0:04:18.760 --> 0:04:24.040 existing job relations relationships and matching between the workers and 0:04:24.120 --> 0:04:29.680 the vacancies is higher in Europe generally, so it made 0:04:29.720 --> 0:04:33.520 more sense to try and protect those relationships and those 0:04:33.560 --> 0:04:36.760 businesses as much as possible so that the this reset 0:04:36.839 --> 0:04:39.840 up cost could be could be lowered and could be avoided. 0:04:40.240 --> 0:04:43.880 There's more tape, there's this problem of restrictriation which is 0:04:43.920 --> 0:04:48.080 not as smooth, and there are different attitudes from the 0:04:48.160 --> 0:04:50.880 public as well on the role of government and how 0:04:50.960 --> 0:04:56.279 much government should protect people against the economic risks and 0:04:56.440 --> 0:05:00.360 economic hazards. So I think all that together meant that 0:05:00.360 --> 0:05:04.440 there was both a lot of um, some economic sense 0:05:04.800 --> 0:05:07.840 in prodicting, in protecting more, and a lot of political 0:05:08.200 --> 0:05:11.240 wadingness to protect more. So yes, I think different, very 0:05:11.279 --> 0:05:15.880 different setups could explain some of the different emergency reaction 0:05:16.040 --> 0:05:19.360 to the crisis. But I guess I mean, rich of 0:05:19.480 --> 0:05:23.040 you look at how the US has responded to this crisis. 0:05:23.080 --> 0:05:27.360 They have in a sense tried to make the US 0:05:27.440 --> 0:05:29.680 sort of less American in the sense of, you know, 0:05:29.760 --> 0:05:33.320 try and reduce the number of bankruptcies and reduced this 0:05:33.560 --> 0:05:38.680 kind of destruction, maybe out of fear that it's it's 0:05:38.760 --> 0:05:41.400 not so creative. I mean, how how much of a 0:05:41.520 --> 0:05:44.560 contrast is there and things like bankruptcy is relative to 0:05:44.640 --> 0:05:48.400 pass recessions at least so far, um well, so far 0:05:48.600 --> 0:05:52.760 on the bankruptcy for the bankruptcy filings are actually down 0:05:52.800 --> 0:05:55.839 about eleven percent, you know, a year over year, and 0:05:56.360 --> 0:05:59.160 and that is generally ascribed to you know, all the 0:05:59.279 --> 0:06:02.359 programs and all the huge trillions of dollars that the 0:06:02.400 --> 0:06:05.560 government is pumping in not only for consumers but but 0:06:05.560 --> 0:06:08.839 but also to give so that they have money to 0:06:08.880 --> 0:06:12.000 go and spend at these companies, but also for the companies. 0:06:12.279 --> 0:06:14.720 Just so just to be clear, there's fewer companies than 0:06:14.839 --> 0:06:18.080 normal I mean than a year ago, are actually going 0:06:18.160 --> 0:06:21.400 bust even though we have this historic recession thus far. 0:06:21.520 --> 0:06:23.960 I mean, you know, we have a big question mark 0:06:24.040 --> 0:06:28.000 now over what comes next one when the stimulus that 0:06:28.800 --> 0:06:31.440 this huge amount of stimulus has put into the economy. 0:06:31.880 --> 0:06:33.719 You know, there's a big question mark here in the 0:06:33.720 --> 0:06:37.520 States about how much of that, how much more the 0:06:37.640 --> 0:06:39.320 US is going to put in. I guess there's also 0:06:39.320 --> 0:06:43.000 a question in Europe to about that. But uh, and 0:06:43.040 --> 0:06:46.960 there's a fear that you will see bankruptcy and even 0:06:47.000 --> 0:06:50.359 in a normal recession, bankruptcy filings go up by about 0:06:50.400 --> 0:06:54.120 fift that's in a normal recession. And the fear is 0:06:54.160 --> 0:06:57.080 that if you had sort of let unbridled creative destruction go, 0:06:57.240 --> 0:07:00.080 you you would have got clogged I mean really on 0:07:00.200 --> 0:07:06.320 bankruptcy courts, and that would would also hurt the economy. Maybe. 0:07:06.520 --> 0:07:09.640 How do you think that European governments are grappling with 0:07:09.680 --> 0:07:13.200 this dilemma? It strikes me we're at a different stage 0:07:13.200 --> 0:07:16.160 of the crisis now when it comes to the economic response. 0:07:16.200 --> 0:07:19.480 You're not just trying to fill the whole. I think 0:07:19.520 --> 0:07:21.240 we've talked about it in the past. You know, you 0:07:21.280 --> 0:07:24.000 look at the hit to incomes that you think is 0:07:24.040 --> 0:07:26.080 coming from the virus, and you're just trying to match 0:07:26.120 --> 0:07:28.920 it to get money to households to try and keep 0:07:28.960 --> 0:07:32.120 the economy afloat. But now are at a point where 0:07:32.120 --> 0:07:36.400 you're trying to encourage growth and also perhaps encourage businesses 0:07:36.400 --> 0:07:40.040 to adjust to a situation where we still have social distancing, 0:07:40.040 --> 0:07:44.400 where we haven't got rid of the virus. Have we 0:07:44.560 --> 0:07:49.600 seen that affect the programs that people are or how 0:07:49.680 --> 0:07:52.680 long programs last? I mean, certainly in the UK recently 0:07:52.680 --> 0:07:55.800 there's been an ongoing debate about how long that furlough scheme, 0:07:55.880 --> 0:07:58.800 that John Protection scheme last, and actually it's supposed to 0:07:59.040 --> 0:08:03.080 still expire in October, even though a lot of companies 0:08:03.120 --> 0:08:05.880 feel that they will still need support from the government 0:08:05.920 --> 0:08:08.360 in October and will probably have to lay people off 0:08:08.400 --> 0:08:10.320 if it's not if their wages aren't going to be 0:08:10.360 --> 0:08:12.960 paid by the government. How is that trade off being 0:08:13.000 --> 0:08:15.960 managed in Europe? In other parts of Europe, yes, we 0:08:16.000 --> 0:08:20.360 are starting to see some shifts from protection to something 0:08:20.440 --> 0:08:22.680 that is maybe a bit closer to re allocation or 0:08:22.720 --> 0:08:26.280 thinking about re allocation. So if you take the case 0:08:26.360 --> 0:08:29.680 of hunts, for instance, the program the Fellow scheme has 0:08:29.720 --> 0:08:33.719 been made a bit less generous for employers already and 0:08:34.240 --> 0:08:37.640 starting from October it will be made less generous for 0:08:37.679 --> 0:08:42.240 both employers and employees, so that employers are encouraged to 0:08:42.679 --> 0:08:45.839 decide what they want to do with their workforce, either 0:08:46.200 --> 0:08:50.160 they take them back or they actually decide that they 0:08:50.200 --> 0:08:52.600 may not need as many people as they used as 0:08:53.000 --> 0:08:55.920 much stuff as they had before. But also if the 0:08:56.080 --> 0:08:58.120 program is less generous, and it used to be at 0:08:58.120 --> 0:09:01.120 the moment, it's a bit more general that unemployed and benefits, 0:09:01.160 --> 0:09:04.520 So if it becomes less generous than unemployment benefits, then 0:09:04.559 --> 0:09:08.079 it creates an incentive for people to start looking like 0:09:08.280 --> 0:09:10.839 becoming an employed and looking for a new job that 0:09:10.920 --> 0:09:14.200 they may not have had with those very generous schemes. 0:09:14.600 --> 0:09:18.000 So we are seeing that altho, clearly they are still 0:09:18.120 --> 0:09:22.360 maintaining self safe some safeguards. So in France it will 0:09:22.400 --> 0:09:26.520 be possible for employers to negotiate with unions and the 0:09:26.600 --> 0:09:29.760 administration to have a longer term plan where they can 0:09:29.840 --> 0:09:32.600 stay on this more generous scheme. But for that they 0:09:32.600 --> 0:09:35.120 will have to have a plan on how they see 0:09:35.200 --> 0:09:38.559 the development unemployment, how quickly they will bring back bring 0:09:38.559 --> 0:09:41.160 back people. Do they need to ra structure, do they 0:09:41.160 --> 0:09:43.880 train people for new jobs and things like that. So 0:09:44.320 --> 0:09:47.920 this is a progressive, gradual shift. But that's going that's 0:09:47.920 --> 0:09:51.199 going on in Spain, for instance, they are playing more 0:09:51.240 --> 0:09:54.600 with the incentives. So if you are starting to bring 0:09:54.640 --> 0:09:57.920 back more workers, then it's more like a wage. They're 0:09:57.960 --> 0:10:01.160 thinking about wage subsidies, so going from retention schemes to 0:10:01.200 --> 0:10:04.280 which subsidies. If you start bringing back more workers, then 0:10:04.480 --> 0:10:08.880 you will pay less of um social contributions for the 0:10:09.160 --> 0:10:12.320 entire workforce and things like that. So it's a it's 0:10:12.360 --> 0:10:15.160 a it's a difficult balance they have to strike because 0:10:15.200 --> 0:10:17.839 they have invested that bit a lot of money on 0:10:18.360 --> 0:10:20.520 this and now they want to make sure that actually 0:10:20.600 --> 0:10:26.319 they don't um lose everything by removing support. But they 0:10:26.360 --> 0:10:29.640 are playing by the year and they are moving step 0:10:29.679 --> 0:10:34.520 based step depending on the evolution of the situation. But 0:10:34.600 --> 0:10:37.120 how do you think, I mean, overall, do you think 0:10:37.160 --> 0:10:39.240 they're still at the stage where they're going to air 0:10:39.360 --> 0:10:43.240 on the side of protecting too many jobs or you know, 0:10:43.240 --> 0:10:45.520 if you're looking down the track and thinking what it 0:10:45.559 --> 0:10:50.280 could be twelve months that the economy is operating seriously 0:10:50.360 --> 0:10:53.280 blow potential and a lot of these businesses are not 0:10:53.920 --> 0:10:59.120 viable in that environment where we still have COVID nineteen. 0:11:00.080 --> 0:11:01.760 Do you think they should still air on the side 0:11:01.800 --> 0:11:04.200 of protecting jobs or should they be thinking a bit 0:11:04.240 --> 0:11:07.880 more about how to help people reinvent themselves. I think 0:11:07.920 --> 0:11:10.920 they will. They are clearly waiting for the summer to see. 0:11:11.360 --> 0:11:13.880 Uh and the tourism question is is a big one 0:11:14.000 --> 0:11:15.839 and it's a big unknown, So I think they are 0:11:15.840 --> 0:11:19.920 really waiting to see. These schemes are expensive. I think 0:11:20.160 --> 0:11:23.160 they will probably keep a lot of protection initially, especially 0:11:23.160 --> 0:11:26.360 if they have some hope that those jobs will become 0:11:26.480 --> 0:11:29.840 vailable in the near future. UM it was the main 0:11:29.920 --> 0:11:32.840 limit to that, I think in their view will be 0:11:32.880 --> 0:11:39.680 the cost rather than the risk of impedding creative creative destruction. 0:11:40.240 --> 0:11:44.480 But I think they will air on the side of custion. Now, Rich, 0:11:44.520 --> 0:11:46.280 I'm going to give the give the last word to 0:11:46.280 --> 0:11:48.840 you because I know how many, many many years that 0:11:48.880 --> 0:11:51.800 you've been covering the US economy. Thank you very much, 0:11:51.880 --> 0:11:57.920 thinking thin and I wonder, I mean it was it's 0:11:57.960 --> 0:12:02.040 been such an extraordinary amount of support coming out of 0:12:02.040 --> 0:12:05.040 the federal government, a lot more than we had in 0:12:05.040 --> 0:12:07.920 the global financial crisis, which itself was considered to be 0:12:08.000 --> 0:12:12.760 a pretty big US fiscal stimulus. Do you do you 0:12:12.840 --> 0:12:18.800 see that the support for that evaporating quite soon? Do 0:12:18.840 --> 0:12:20.360 you see it as a temporary thing. Do you think 0:12:20.400 --> 0:12:22.640 we are going to see America sort of shift back 0:12:22.640 --> 0:12:26.160 to a more sort of an ethos that favors creative 0:12:26.200 --> 0:12:30.680 destruction or will we see that same kind of balance 0:12:30.760 --> 0:12:33.880 that maybe's talking about people actually wanting to protect rather 0:12:33.960 --> 0:12:37.960 than have companies go to the war. Yeah, difficult question, 0:12:38.440 --> 0:12:40.760 and obviously with an election coming up that would also 0:12:41.520 --> 0:12:47.800 affect it. But um, I think there would There would 0:12:47.800 --> 0:12:50.640 still probably be more I think in the short term, 0:12:50.640 --> 0:12:52.319 and I think maybe is rightly that they will the 0:12:52.360 --> 0:12:55.400 emphasis will be on protection, though maybe perhaps in the 0:12:55.520 --> 0:12:59.960 in the in the longer term it might be more 0:13:00.040 --> 0:13:04.880 on reinvention. But there's a lot of moving parts going on, 0:13:05.040 --> 0:13:10.040 and the US is both Republicans and Democrats are moving 0:13:10.720 --> 0:13:13.240 arguably towards in a little bit more of the direction 0:13:13.360 --> 0:13:18.559 of industrial policy type, and that is not necessarily creative destruction. 0:13:18.640 --> 0:13:23.160 That's government sort of playing a bigger hand. Uh So, 0:13:24.000 --> 0:13:26.000 But I would I would think that that the US 0:13:26.080 --> 0:13:29.840 ethos is still towards more reinvention than protection, and that 0:13:29.880 --> 0:13:34.000 would probably you know, um went out so to speak, 0:13:34.040 --> 0:13:37.280 in the longer run, I guess one of us. So 0:13:37.440 --> 0:13:40.680 I was just thinking one of the other question one 0:13:40.760 --> 0:13:45.720 might have is whether the US has gone a bit soft. 0:13:46.040 --> 0:13:49.120 You know, we've heard a lot of talk about big 0:13:49.200 --> 0:13:54.320 tech giants kind of dominating certain companies and they're being 0:13:54.360 --> 0:13:57.640 a lot less competition and maybe less creative destruction in 0:13:57.679 --> 0:14:02.000 those sectors. We've there's the the mobility numbers have gone down, 0:14:02.120 --> 0:14:05.760 so people seem to be less willing now to change 0:14:06.320 --> 0:14:08.840 to move across the country for a job as maybe 0:14:08.920 --> 0:14:13.280 they used to in the pose used to associate that 0:14:13.360 --> 0:14:17.880 with American workers. So is that is there is there 0:14:17.920 --> 0:14:20.000 an element of that rich that maybe it was never 0:14:20.680 --> 0:14:25.040 was not really as creatively destructive environment in the US 0:14:25.320 --> 0:14:27.840 and hasn't been for quite a long time. Well, I 0:14:27.880 --> 0:14:30.080 think that there's definitely an element, and that that they 0:14:30.120 --> 0:14:34.440 know that the differences between the two regions maybe maybe less. 0:14:35.080 --> 0:14:40.920 Then it's sort of commonly portrayed. And if the Democrats win, 0:14:41.200 --> 0:14:44.920 you'll you'll have you know, an emphasis more on worker rights, 0:14:45.000 --> 0:14:48.840 more on union power, which will tend to look a 0:14:48.840 --> 0:14:54.000 little bit more like the European model and not anywhere 0:14:54.040 --> 0:14:57.080 near like that, but it would be moving in that direction. 0:14:58.720 --> 0:15:03.520 So the gaps between m hm us and Europe narrowing, 0:15:03.520 --> 0:15:06.560 and not just on this podcast. But thank you very much, 0:15:07.480 --> 0:15:19.440 Rich Miller and Vakuza. Thank you, Thank you m h 0:15:20.400 --> 0:15:23.440 Now that story I promised you. From Japan, here's economy 0:15:23.480 --> 0:15:27.600 reporter Yuko Takeo speaking from a special location in Tokyo. 0:15:36.560 --> 0:15:39.360 COVID nineteen has turned two thousand and twenty into a 0:15:39.440 --> 0:15:44.680 year postperments, and Japan is no exception. I'm here outside 0:15:44.680 --> 0:15:48.160 Tokyo's Olympic Stadium, where thousands of visitors from around the 0:15:48.160 --> 0:15:51.240 world should have been enjoying the now postponed games and 0:15:51.320 --> 0:15:55.880 cheering on the country's medal hopes. But even without the virus, 0:15:56.080 --> 0:15:59.240 there's one goal Japan's male dominated society never looked like 0:15:59.320 --> 0:16:08.040 achieving this year, filling leadership positions for women. Back in February, 0:16:08.160 --> 0:16:11.240 I've met fifty year old aspiring politician Multiple Missing at 0:16:11.280 --> 0:16:14.640 an event in the area of Customer Gazipi, the heartland 0:16:14.640 --> 0:16:17.920 of Japanese politics, whose name roughly translates to the gated 0:16:18.000 --> 0:16:23.400 miss organized by the Academy for Gender Parity. Two female 0:16:23.400 --> 0:16:25.520 and Peace were speaking there about some of the ups 0:16:25.560 --> 0:16:27.640 and downs they faced in the high stressed world of 0:16:27.720 --> 0:16:32.000 Japanese politics. Later, Momuticle also taught me about some of 0:16:32.040 --> 0:16:40.000 the gender disparities that possist. If you're a man going 0:16:40.040 --> 0:16:43.240 into politics, often there's a positively you go kind of 0:16:43.280 --> 0:16:46.240 push for them. Their wife often helps them, and the 0:16:46.320 --> 0:16:49.200 manpower at least doubles. But when a woman like me 0:16:49.320 --> 0:16:53.920 tries to do the same thing, everyone says, don't do it. 0:16:54.600 --> 0:16:57.960 Unless political parties decide they want to increase the number 0:16:58.000 --> 0:17:13.280 of women, it doesn't really. According to the World Economic 0:17:13.320 --> 0:17:16.520 Forum's latest rankings of gender based disparity in things like 0:17:16.600 --> 0:17:22.040 economic participation, health, education, and political empowerment, Japan ranks a 0:17:22.119 --> 0:17:25.200 hundred and twenty first in the world. That's below the 0:17:25.280 --> 0:17:29.760 United Arab Emirates and Sierra Leone. Only ten percent of 0:17:29.840 --> 0:17:32.520 Lower House MPs are women unless than one percent of 0:17:32.560 --> 0:17:35.280 CEO is a companies listed on Japan's stock exchange. Our 0:17:35.320 --> 0:17:39.560 female that hasn't stopped prime ministicians areb from ruling the 0:17:39.680 --> 0:17:44.120 government's progress, especially in the jobs market. The women's labor 0:17:44.160 --> 0:17:49.080 participation rate has dramatically increased under abets tenure. Still, the 0:17:49.119 --> 0:17:52.199 coronavirus has a wound. Some of these games, revealing the 0:17:52.240 --> 0:17:56.679 fragility of progress. In April, the number of working women 0:17:56.680 --> 0:17:58.520 fell for the first time in more than eight years. 0:17:59.440 --> 0:18:02.439 This is an only a japan story. Around the world, 0:18:02.760 --> 0:18:05.320 the pandemic has hit women harder because they are more 0:18:05.359 --> 0:18:08.880 likely to work part time or beyond short and contracts, 0:18:09.480 --> 0:18:12.280 and they often work in sectors like tourism and hospitality, 0:18:12.480 --> 0:18:16.920 which have been worse out back in Marge I talked 0:18:16.960 --> 0:18:19.720 forty eight year old Nick Orson, one of the more 0:18:19.760 --> 0:18:22.919 than three million women who joined the workforce under Abbey's tenure. 0:18:23.760 --> 0:18:26.280 She started working part time at a local bakery two 0:18:26.359 --> 0:18:32.240 years ago after her youngest sons started school can keep. 0:18:33.359 --> 0:18:36.439 I thought it would give me a change of scenery 0:18:36.640 --> 0:18:40.120 and we would need the money going ahead. My eldest 0:18:40.400 --> 0:18:43.159 is starting middle school, so we would need money for 0:18:43.200 --> 0:18:47.919 a cram school. There's fees are expensive, so our outgoings 0:18:48.000 --> 0:18:51.640 are going to get larger. My younger son is doing 0:18:51.680 --> 0:18:56.359 more extra curricular activities as well, and these extra expenses 0:18:56.400 --> 0:18:58.359 of the two kids are a big way on our 0:18:58.440 --> 0:19:03.520 household budget, and the ro looked at what's going play. 0:19:04.280 --> 0:19:07.119 Fast forward two months and the Yokohama resident is no 0:19:07.160 --> 0:19:10.920 longer an example of progress under Albe. Instead, she's one 0:19:10.920 --> 0:19:13.240 of more than three hundred thousand women who lost their 0:19:13.320 --> 0:19:17.040 jobs in April and May. That was during Japan's state 0:19:17.040 --> 0:19:19.760 of emergency, when people were urged to stay home and 0:19:19.800 --> 0:19:24.360 work from home as much as possible. When does things 0:19:24.400 --> 0:19:28.480 of the emergency was announced that bakery was temporarily closed. 0:19:28.880 --> 0:19:32.120 We were supposed to go back once the emergency was lifted, 0:19:32.880 --> 0:19:37.119 but without any revenue, the bakery, like many others, wasn't 0:19:37.160 --> 0:19:43.000 able to open again without a downsizing. The bakery disclosure 0:19:43.080 --> 0:19:45.560 cave as a shock, but really goes looking for new 0:19:45.600 --> 0:19:48.080 part time work, and she's happy that her two sons 0:19:48.119 --> 0:19:51.760 can now go to school again. When the pandemic prompted 0:19:51.880 --> 0:19:54.880 school closures, the building of more childcare fell on women 0:19:54.960 --> 0:19:58.840 more than men. All that mirror developments in other nations 0:19:58.920 --> 0:20:02.359 across the world. Women in Japan were already carrying a 0:20:02.440 --> 0:20:08.240 higher burden than in other advanced For colomies one couples 0:20:08.280 --> 0:20:11.879 with young children, Japanese wife's spent six times the amount 0:20:11.880 --> 0:20:14.360 of hours in child care and health work than the husband's. 0:20:15.119 --> 0:20:18.000 In the US, France and Germany, the ratio is roughly 0:20:18.040 --> 0:20:21.880 only double. Nichols says she's happy to have been able 0:20:21.920 --> 0:20:24.360 to watch her son's grow up, but she's also had 0:20:24.400 --> 0:20:26.919 to basically be a single parent for years when her 0:20:27.000 --> 0:20:30.520 husband's job first took him to Shanghai than another prefecture 0:20:30.520 --> 0:20:37.680 in Japan. Was toughest. When I like to say, my 0:20:37.760 --> 0:20:40.560 parents don't live that close, so there was no one 0:20:40.600 --> 0:20:44.280 I could rely on. The first year after my husband 0:20:44.320 --> 0:20:48.280 moved to China, I was really sick and my youngest 0:20:48.359 --> 0:20:51.760 was about one year old. That was the toughest time, 0:20:52.080 --> 0:20:55.120 and it was difficult that my husband wasn't there when 0:20:55.160 --> 0:21:03.920 I was ill, but in a different part of Japan. 0:21:04.280 --> 0:21:07.160 Multiple the women I've met at the politicians event back 0:21:07.200 --> 0:21:10.120 in February, it's been trying to represent people like Rumical. 0:21:11.320 --> 0:21:15.120 That's a tough route given Japan's female representation in parliament 0:21:15.160 --> 0:21:17.400 rights a hundred and thirty five in the world according 0:21:17.400 --> 0:21:21.320 to the World Economic Forum. Multiple built her career in 0:21:21.359 --> 0:21:23.880 the field of aerospace, and she beams when she talks 0:21:23.880 --> 0:21:28.439 about space. She worked at Jackson, Japan's version of NASA 0:21:28.640 --> 0:21:31.480 for nearly three decades, and it's planning on running for 0:21:31.520 --> 0:21:35.280 the next lower House elections. But as a working mother 0:21:35.280 --> 0:21:38.360 who has no previous choice of politics, she says it's 0:21:38.400 --> 0:21:43.040 not an easy ride. Yeah. In Japan, it's difficult to 0:21:43.160 --> 0:21:46.720 enter politics unless you have a political family, fame, or money. 0:21:47.560 --> 0:21:50.679 Right now, it's mostly men in this world, so unless 0:21:50.720 --> 0:21:54.920 there's a major support, you can't step in. Another challenge 0:21:55.160 --> 0:21:59.439 is balancing it with everything else all the moments. I'm 0:21:59.520 --> 0:22:02.600 running for office despite being a single mother, so of 0:22:02.640 --> 0:22:05.800 course people have a lot of opinions. I've worried a 0:22:05.800 --> 0:22:08.879 lot over that. But my conclusion is that I can't 0:22:08.880 --> 0:22:10.959 bear to hand over Japan as it is to my 0:22:11.040 --> 0:22:14.919 children and their generation. I can't stand it when I 0:22:15.000 --> 0:22:17.760 pass it over to the next generation. I want to 0:22:17.760 --> 0:22:20.640 be able to do it with confidence. I don't want 0:22:20.680 --> 0:22:23.399 to say I'm sorry, Japan is in this state. Please 0:22:23.400 --> 0:22:27.439 do your best with it. Took your governor Urico procle 0:22:27.640 --> 0:22:30.280 one re election earlier this month in a race which 0:22:30.400 --> 0:22:34.080 faced twenty one challenges, but while she has gone it 0:22:34.119 --> 0:22:36.639 praised for her faster response to the pandemic than the 0:22:36.680 --> 0:22:40.280 other administration. She's one of only two female leaders in 0:22:40.359 --> 0:22:44.800 Japan's forty seven prefectures. Caffee Matson, vice chair of Golden 0:22:44.880 --> 0:22:48.000 SAX Japan, coined the term women no Mix back in 0:22:50.280 --> 0:22:52.919 she has normally. The commic argument to boost the female 0:22:52.920 --> 0:22:57.560 representation in both the public and corporates is so based 0:22:57.560 --> 0:23:01.960 on our analysis, if you could close Japan's gender employment 0:23:02.040 --> 0:23:06.000 gap and encourage were women to work full time as 0:23:06.000 --> 0:23:08.359 well as the part time, you could live Japanese GDP 0:23:08.440 --> 0:23:13.840 by as much as fifteent, which is huge. Aspiring politician 0:23:14.000 --> 0:23:16.879 Motorco argues that more women in parliament will also have 0:23:16.960 --> 0:23:20.480 a host of positives policy making that's more in hune 0:23:20.480 --> 0:23:25.320 with normal people's lives, better representation of women's concerns, and 0:23:25.440 --> 0:23:33.920 more innovation through diversity. What decides the core of Japan's 0:23:33.960 --> 0:23:38.600 future is politics. I finally realized this at nearly fifty, 0:23:38.920 --> 0:23:43.080 after I'd lived for five decades. But if I'd realized 0:23:43.080 --> 0:23:46.040 this when I was younger, maybe I would have taken 0:23:46.040 --> 0:24:06.520 that past sonn probl B News. I'm Muko Teco. Thanks 0:24:06.560 --> 0:24:08.760 for listening to Stephanomics. We'll be back next week with 0:24:08.800 --> 0:24:12.960 more on how COVID nineteen is transforming the global economy. 0:24:13.240 --> 0:24:16.160 Remember you can always find us on the Bloomberg terminal, website, 0:24:16.200 --> 0:24:18.760 app or wherever you get your podcasts. And for more 0:24:18.800 --> 0:24:23.320 news and analysis from Bloomberg Economics, follow at Economics on Twitter. 0:24:24.000 --> 0:24:27.000 This episode was produced by Magnus Hendrickson, with special thanks 0:24:27.040 --> 0:24:31.160 to Rich Miller, Mava Kusin, William Horrbin, and Paul Jackson 0:24:31.160 --> 0:24:34.840 in Tokyo. Lucy Meekin is the acting executive producer of 0:24:34.840 --> 0:24:38.399 Stephanomics and the head of Bloomberg podcast is Francesca Levy.