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Commercial Times: Face up to Taiwan's wage decline

2013/10/29 17:14:31

Due to the slow increase in wages in recent years, Taiwan workers have seen their average real income fall back to the 1997 level.

The Directorate General of Budget, Accounting and Statistics (DGBAS), however, has argued that in the past four years, the average real wage in Taiwan has actually grown more than in Japan, South Korea, Singapore and the United States thanks to Taiwan's stable consumer prices.

That argument is fallacious and should be examined closely.

According to the DGBAS, over the past four years, nominal wages in South Korea and Singapore have risen 13.6 percent and 14.5 percent, respectively, compared with 8.5 percent in Taiwan. When inflation rates were taken into account, however, the real wage growth in South Korea was actually 3.8 percent and in Singapore 1.2 percent, while Taiwan's was 4 percent, the DGBAS said.

In Japan, it was 0.6 percent, and in United States minus 0.9 percent, the DGBAS said.

The fact is, in the first eight months of this year, the average monthly wage of Taiwan workers was only NT$46,111, lower than in 1998 when it was NT$46,856.

Between 2002 and 2012, Taiwan's real wage growth was minus 0.31 percent, significantly lower than South Korea's 2.6 percent, Hong Kong's 1.2 percent and Singapore's 0.9 percent. Taiwan's performance was only slightly better than Japan's minus 0.81 percent.

One of President Ma Ying-jeou's election promises was to increase people's income. In the face of declining income levels, however, the government has refused to do any soul-searching but rather has been trying to delude itself through various types of sophistry.

The government should take a good look at the situation in Taiwan today. The middle class is gradually disappearing, over 900,000 people have been affected by unemployment, the number of atypical workers is on the rise, and families are losing their purchasing power as a result of rising prices.

Premier Jiang Yi-huah's Cabinet should stop advancing self-deluding arguments and should present meaningful policies soon to address the problems. (Editorial abstract -- Oct. 29, 2013)

(By Y.F. Low)
ENDITEM /pc