The Executive Yuan is seeking special budgets of NT$70 billion for two plans it has proposed to the Legislative Yuan -- one to expand infrastructure and the other to expand public services and create jobs. This has prompted much debate.
Although more than 60 percent of respondents in an opinion poll supported the plans, some suspect the government's motives while others worry about the likely effects and consequences, saying, in particular, that such plans will leave our children in debt. In response to these concerns, the Cabinet has made repeated explanations already. But I hope to make clear in this article my overall thinking on the current unemployment problem, as well as the values behind the plans.
The fundamental solution to the nation's unemployment problem lies in boosting the economy. The Cabinet's Challenge 2008 Six-Year National Development Plan stresses the importance of upgrading the nation's talent, industry, environment and culture in order to strengthen Taiwan's all-round competitiveness and ensure a successful transformation. In the 21st century, Taiwan will be transformed into a high-tech "information society" and will reposition itself in the world. The unemployment problem will be solved in readiness for that transformation.
It takes some time to effect a permanent cure. But the unemployment problem during a process of transformation is never a minor issue. Tens of thousands of anxious and worried households are suffering as a result of unemployment. These households cannot wait, nor can the government sit back and watch the problem grow.
In advanced countries, employment policies have moved from the passive payment of unemployment benefits to the provision of aggressive employment services, vocational training and job creation, designed to help workers back into the workplace. Taiwan did not start providing unemployment subsidies until early 1999. The DPP government further eased restrictions on the subsidies in December 2000, helping the increased number of unemployed workers to solve their difficulties temporarily.
As the jobless rate has continued to rise, the government has rebuilt the vocational training system while strengthening various employment services. It has also launched a "sustainable employment project," which provided about 25,000 short-term jobs between early 2001 and May last year. Although some of those responsible for implementing that project performed poorly, their number was very small, and they have all been severely punished. Since more than 20,000 households were helped by this major employment project, its gains and losses are quite obvious. I fear that some rumors aimed at denying the effectiveness of this aggressive project are not exactly fair.
Although Taiwan's economic growth rate has been in positive territory since the end of last year, it will not be easy for most of the long-term unemployed to find work again quickly solely as a result of market forces. It is for that reason that we decided to launch the infrastructure and public-service expansion plans to assist them.
From passive subsidies to active employment assistance, the government's policies not only echo society's needs but also tally with progressive global trends.
Some believe that the infrastructure expansion plan will at least leave us with some hardware while the public service expansion plan will only help to recruit workers. They say that the effects of the latter will soon disappear like ripples, and that the likely low return on the investment renders it not worth making.
My personal view on this is different. Long-term unemployment could cause a person to lose hope and ambition, or even force him or her to withdraw from the workplace forever, which would be a significant loss for that person, his or her family, and for society at large. Temporary job offers that help the long-term jobless to keep their hopes up and slowly assist them to return to the workplace are definitely valuable investments.
Such offers can reduce family tragedies, narrow the gap between rich and poor and promote social stability, accumulating valuable, intangible social capital for the nation in the process. Although such social capital cannot be reflected in Taiwan's GNP, it nevertheless constitutes a valuable return on the investment.
Besides, the public service expansion plan demands that each of the government agencies brings forward the implementation of future administrative plans, while coordinating employment policy with national development, enhancing the plan's effectiveness. These carefully designed job programs are valuable both to society at large (the computer scanning of documents, for example, facilitates the development of "e-government;" afforestation work helps to beautify the environment) and to the unemployed (helping them to develop self-recognition, for example, through their work). In fact, just like the cultural values and environmental ecology emphasized in the Cabinet's "Challenge 2008" plan, these jobs also reflect a "human-centered" approach to economic development.
If the government really wanted simply to secure votes for the 2004 presidential election, it would need only to pay more subsidies to the unemployed. Why would it exert itself in proposing the two plans to the legislature?
Some have questioned why the two plans were not proposed a little earlier. The conventional wisdom is that, when the economy has just entered a downturn, no special measures should be applied to stimulate it. But the global economic recovery has been slow, and the number of jobless in Taiwan is high. The time has come for the government to intervene in the matter to protect the unemployed.
The domestic jobless rate usually begins to go up in March and April. If timely action is not taken to prevent this, once the problem is out of control, the resulting massive unemployment will reduce domestic consumption and throw more people out of work. It will be even more difficult to lower the jobless rate if such a "domino effect" occurs. We have therefore decided to implement the two plans as soon as possible.
The late British economist, Alfred Marshall, once said that economists should have both a warm heart and a cool head. I find these words deeply moving. When making policy decisions, we should certainly estimate the costs and effects of the proposed policy with cool heads. These have been thoroughly considered in the two plans.
More importantly, we must recognize the human values behind the economic ones with a warm heart. We have heard the people's cries for help in the tens of thousands of phone calls that have flooded the local employment service offices nationwide. The unemployed need jobs. They want to contribute to society. Can we let them down?
Yu Shyi-kun is the premier.
TRANSLATED BY EDDY CHANG
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