Lagging on LGBTI rights can harm Japan’s economy

Japan has made considerable strides on legal protections for lesbian, gay, bisexual, transgender and intersex (LGBTI) people in recent years, raising awareness and creating non-binding local policies. Without national-level changes, though, Japan remains behind the rest of the G7 countries that will soon be meeting in Japan to talk about economic issues. In past statements, the Group of Seven have recognized the many challenges faced by LGBTI people, and it’s time for the G7, and Japan in particular, to put inclusion on their economic agenda.  With a global understanding emerging that LGBTI inclusion is not just good for LGBTI people, it is important to recognize it is essential for Japan’s economy. How do rights connect with the health of any economy?  Discrimination, harassment, and violence in schools, workplaces and the larger community are everyday experiences for LGBTI people in Japan (and other countries). They face barriers to getting a good education, the right skills, and respectful, well-paying jobs. Those disadvantages also take a toll on both mental and physical health.  Put together, these forms of exclusion also mean our economies lose out on skills, knowledge, and creativity of LGBTI people – what economists call “human capital.” Less human capital means lower economic capacity and output. That’s one key reason countries that are more inclusive of LGBTI people have higher GDP per capita.  Japanese researchers have documented the toll of stigma on mental health. LGBTI people in Japan are twice as likely as non-LGBTI people to experience depression and are four to six times as likely to consider or attempt suicide. The difference most likely reflects the stresses related to the social and legal treatment of LGBT people. Research on the economic cost of these mental-health conditions in Japan has found that these two health disparities alone cost the Japanese economy from 100 billion to 418 billion yen per year (US$750 million to $3 billion).   Studies in other countries that have been able to measure workplace costs as well as health and other costs have found that the benefits of LGBTI inclusion are 1% or more of GDP, and if we had good measures of the effect on education, those cost figures would be even higher.  While researchers cannot yet quantify the additional costs from workplace and education exclusion in Japan, studies reveal the depth of the problem. For example, one survey of young Japanese LGBTI people found that 68% of them have experienced violence in school. Studies comparing workplaces in different countries show that college-educated LGBTI employees in Japan are more closeted, or hidden, than workers in the US, the UK and India, plus they appear to earn less than non-LGBTI workers with the same qualifications.  Falling short Given what’s at stake for the lives of LGBTI people and the success of the economy, Japan’s legal measures to date have not gone far enough.  Some 260 municipalities and 11 prefectures have established a “partnership oath system,” or unofficial recognition for these couples, demonstrating widespread support for change across the country. More than 4,000 same-sex couples have enthusiastically responded by registering, although many more are waiting for the chance to marry and be recognized at the national level. Almost two-thirds of the Japanese public supports marriage equality for same-sex couples.  Japan also lacks non-discrimination protections for LGBTI people in the workplace and other market settings, despite a campaign calling for an Equality Act. The ruling party’s suggestion instead to pass a “promotion of understanding” law does not have the teeth needed to be an effective tool for stopping discrimination.  And finally, Japanese law forces transgender people who want to change their gender legally to appeal to a family court, where they must meet stringent and unreasonable standards. This process prevents many people from living their full lives and curtails their participation in the economy.  Tellingly, the business community is ahead of the national government on these issues, demonstrating the importance of inclusion in the economy. The business case for LGBTI inclusion is rooted in attracting and keeping talented workers and enhancing innovation. According to the Ministry of Health, Labor and Welfare, 43% of large employers are implementing LGBTI-inclusive policies. And as of last month, 369 companies and organizations representing more than 1.5 million employees had publicly expressed their support for Business for Marriage Equality in Japan.  Japan has much to gain from improving laws that make Japan more LGBTI-inclusive, including catching up to the rest of the G7. LGBTI people’s health and economic position will be stronger, and non-LGBTI people will gain an inclusion dividend from a stronger Japanese economy. 

Lagging on LGBTI rights can harm Japan’s economy

Japan has made considerable strides on legal protections for lesbian, gay, bisexual, transgender and intersex (LGBTI) people in recent years, raising awareness and creating non-binding local policies. Without national-level changes, though, Japan remains behind the rest of the G7 countries that will soon be meeting in Japan to talk about economic issues.

In past statements, the Group of Seven have recognized the many challenges faced by LGBTI people, and it’s time for the G7, and Japan in particular, to put inclusion on their economic agenda. 

With a global understanding emerging that LGBTI inclusion is not just good for LGBTI people, it is important to recognize it is essential for Japan’s economy. How do rights connect with the health of any economy? 

Discrimination, harassment, and violence in schools, workplaces and the larger community are everyday experiences for LGBTI people in Japan (and other countries). They face barriers to getting a good education, the right skills, and respectful, well-paying jobs. Those disadvantages also take a toll on both mental and physical health. 

Put together, these forms of exclusion also mean our economies lose out on skills, knowledge, and creativity of LGBTI people – what economists call “human capital.” Less human capital means lower economic capacity and output. That’s one key reason countries that are more inclusive of LGBTI people have higher GDP per capita. 

Japanese researchers have documented the toll of stigma on mental health. LGBTI people in Japan are twice as likely as non-LGBTI people to experience depression and are four to six times as likely to consider or attempt suicide. The difference most likely reflects the stresses related to the social and legal treatment of LGBT people.

Research on the economic cost of these mental-health conditions in Japan has found that these two health disparities alone cost the Japanese economy from 100 billion to 418 billion yen per year (US$750 million to $3 billion).  

Studies in other countries that have been able to measure workplace costs as well as health and other costs have found that the benefits of LGBTI inclusion are 1% or more of GDP, and if we had good measures of the effect on education, those cost figures would be even higher. 

While researchers cannot yet quantify the additional costs from workplace and education exclusion in Japan, studies reveal the depth of the problem.

For example, one survey of young Japanese LGBTI people found that 68% of them have experienced violence in school. Studies comparing workplaces in different countries show that college-educated LGBTI employees in Japan are more closeted, or hidden, than workers in the US, the UK and India, plus they appear to earn less than non-LGBTI workers with the same qualifications. 

Falling short

Given what’s at stake for the lives of LGBTI people and the success of the economy, Japan’s legal measures to date have not gone far enough. 

Some 260 municipalities and 11 prefectures have established a “partnership oath system,” or unofficial recognition for these couples, demonstrating widespread support for change across the country.

More than 4,000 same-sex couples have enthusiastically responded by registering, although many more are waiting for the chance to marry and be recognized at the national level. Almost two-thirds of the Japanese public supports marriage equality for same-sex couples. 

Japan also lacks non-discrimination protections for LGBTI people in the workplace and other market settings, despite a campaign calling for an Equality Act. The ruling party’s suggestion instead to pass a “promotion of understanding” law does not have the teeth needed to be an effective tool for stopping discrimination. 

And finally, Japanese law forces transgender people who want to change their gender legally to appeal to a family court, where they must meet stringent and unreasonable standards. This process prevents many people from living their full lives and curtails their participation in the economy. 

Tellingly, the business community is ahead of the national government on these issues, demonstrating the importance of inclusion in the economy. The business case for LGBTI inclusion is rooted in attracting and keeping talented workers and enhancing innovation.

According to the Ministry of Health, Labor and Welfare, 43% of large employers are implementing LGBTI-inclusive policies. And as of last month, 369 companies and organizations representing more than 1.5 million employees had publicly expressed their support for Business for Marriage Equality in Japan. 

Japan has much to gain from improving laws that make Japan more LGBTI-inclusive, including catching up to the rest of the G7. LGBTI people’s health and economic position will be stronger, and non-LGBTI people will gain an inclusion dividend from a stronger Japanese economy.