For governments to effectively resolve economic issues, they need to understand the unemployment situation in their nations and the causes of high unemployment, Nobel laureate in Economics Dale Mortensen said in a speech in Taipei yesterday.
Mortensen said Taiwan was performing fairly well among the four “Asian Tigers,” with unemployment at 4.4 percent and an inflation rate of 1.8 percent, indicating that the country has successful monetary policies.
However, it still needs to be cautious of an impact from a second global recession, as developed countries economies remains distressed, he warned in his speech, titled “The Labor Market Response to the Great Recession.”
Governments have long neglected academics’ calls to pay attention to the widening wealth gap, he said, adding that global economic growth has only benefited the richest 10 percent of the population, and even if their wealth is redistributed to the poor, the poor will only become poorer.
The Occupy Wall Street movement in the US reflects people’s growing resentment of the widening wealth gap, for which both Democrats and Republicans are responsible, he added.
As for youth unemployment in Taiwan, Mortensen said youth unemployment has been a tough problem the world over since the global financial crisis in 2008, further deepening wealth gap.
However, Denmark and Sweden were examples of nations whose financial policies and tax reforms have helped bridge the wealth gap by creating more jobs and stimulating domestic consumption.
During a panel discussion with local economists and corporate leaders in the afternoon, Mortensen said Taiwan’s education system could play a role by help students learn abilities wanted by local companies, which in turn would help the firms expand in China.
His comment came after Far Eastern Group (遠東集團) chairman Douglas Hsu (徐旭東) said Taiwanese companies were facing shortage of people to fill top-ranking positions in their Chinese operations, including the group’s subsidiaries and branches there.
“In this case, the government has the responsibility to educate more students qualified to take high-level positions in China,” Mortensen said.
Tang Ming-je (湯明哲), vice president at National Taiwan University, said Taiwan as a whole was facing a “brain drain” because a growing number of people are choosing to work for foreign companies in China.
The problem might become more serious in the next five to 10 years as globalization expands, Mortensen said, adding the problem was not unique to Taiwan since countries such as the UK suffered from a similar situation years ago.
Industrial upgrades would not only help keep local professions in their home market, but also attract talented foreigners, he said.
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