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Jobless rate hits four-year high

Global financial turmoil took the blame yesterday for pushing the nation’s unemployment rate up to 4.27 percent last month, a figure expected to continue climbing as the crisis unfolds.

The unemployment rate hit a four-year high of 4.27 percent last month, up 0.13 percentage points from a month earlier, defying a seasonal drop in unemployment normally seen at the end of summer, a report by the Directorate General of Budget, Accounting and Statistics (DGBAS) showed yesterday.

The seasonally adjusted jobless indicator gained 0.19 percentage points to 4.12 percent — also the highest in four years — prompting the statistics agency to warn the nation to brace for tough times ahead.

“It is uncommon for unemployment figures to rise even though it’s the end of the summer,” Census Bureau Deputy Director Huang Jiann-jong (黃建中) told a media briefing. “The trend showed a structural change in the labor market. The economic downturn has cost an increasing number of people their jobs.”

About 145,000 people, or 31.2 percent of the nation’s approximately 466,000 unemployed, lost their jobs because of company downsizing or closures, compared with 130,000 people in August, the DGBAS report showed.

Huang attributed their plight chiefly to the ongoing international credit crunch, which is hurting the nation’s export growth and denting the profit margins of domestic firms. China Steel Corp (中鋼), Chi Mei Optoelectronics Corp (奇美電子), China Airlines (華航) and other major enterprises have announced downsizing plans to cope with the global downturn.

Huang said most of the people laid off were middle-aged or older. People with a college degree or graduate degree continued to top the jobless population at 4.94 percent, followed by people with high school education.

UBS Wealth Management Research Taiwan director Kevin Hsiao (蕭正義) said the unemployment figures indicated the financial woes gripping major US and European banks had spread to other industries and Taiwan was not immune.

Hsiao predicted the jobless rate at home would escalate as the US economy is heading toward recession and demand for consumer products is bound to sink.

“With sales down and profits squeezed, companies will have to cut costs,” Hsiao said by telephone. “They may do so by reducing personnel, capital and advertisement outlays.”

Polaris Research Institute president Liang Kuo-yuan (梁國源) echoed the pessimistic sentiment.

“The rising jobless rate has deepened worries about recession at home,” Liang said by telephone. “Taiwan’s heavy dependence on exports [for economic growth] makes the country vulnerable amid a global slowdown.”

Liang said that while the concerted effort by world governments was able to restore order to the international financial system, it could not halt all damage to other sectors.
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