Taiwan’s employment outlook is likely to remain bleak over the coming year, despite recent signs of improvement in the economic situation, Council for Economic Planning and Development (CEPD) officials said yesterday.
This is typical of a “jobless recovery” — recovery from a recession in the absence of strong employment growth — the officials said.
According to the latest data released by the Directorate General of Budget, Accounting and Statistics, the unemployment rate hit a new high of 5.94 percent in June, with 647,000 people out of work.
The number of employed people increased by 0.03 percent month-on-month to 10.24 million in June — the third consecutive month in which growth was recorded. However, compared with the same month last year, the number was down by 170,000, or 1.63 percent.
The results of a recent CEPD study reveal that the employment market tends to take longer to recover than the economy itself, as was the case during the economic downturn following the bursting of the dot-com bubble in 2001.
While it took six quarters for Taiwan’s economy to recover from the recession, the unemployment rate did not return to its level before the bubble burst, despite 30 quarters of consolidation, the report shows.
CEPD officials noted that employers usually wait until an economic recovery is established or the economy begins to thrive before they increase hiring.
Under these circumstances, the number of employed people is unlikely to post a year-on-year growth at least until the second quarter of next year, the officials said. A return to the level before the global financial crisis hit will probably take until late next year or 2011, they added.
A strong recovery momentum will be essential to drive the unemployment rate down to below 4 percent — the level before the start of the financial crisis, they said.
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