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Commercial Times: Wealth gap widening between generations

2013/09/24 17:36:50

A recent survey reveals that in the second quarter of this year, Taiwanese families that own their own homes spent 30 percent of their incomes repaying mortgage loans every month on average. In Taipei, where housing prices are the highest, mortgage repayments accounted for 45 percent of household incomes on average.

The results demonstrate that the financial burden on homebuyers in Taiwan has continued to increase. The burden on young homebuyers is even heavier due to declining salaries.

According to government statistics, the disposable annual income of people aged below 30 averaged only NT$366,000 (US$12,388) in 2012, lower than NT$380,000 in 1999.

In 2012, the starting monthly salaries for bachelor's degree holders averaged NT$26,000, down from NT$28,000 in 1999. The average starting salary of master's degree holders was NT$31,000, up only slightly from 13 years ago, when the average salary was NT$30,000.

There is an obvious trend in which wealth is concentrated in the hands of the older generations.

In 2010, 75 percent of residential properties in Taiwan were owned by people aged 45 or older, with homeowners younger than 35 accounting for only 8 percent. Many of these young homeowners are believed to have obtained financial support from their parents. In other words, the situation for young people is even worse than it appears.

When discussing the issues of income distribution and the wealth gap, the government has often focused on the divide between rich and poor and has overlooked the expanding disparity between generations. At a time when discontent and resentment triggered by the intergenerational gap is spreading in society, we urge the government to pay attention to the matter and seek solutions to the problem. (Editorial abstract -- Sept. 24, 2013)

(By Y.F. Low)