Thu, Jan 18, 2007 - Page 8 News List

DPP must prioritize creation of new jobs

By Lin Kuo-hua 林國華

Few have HAD kind words for former DPP legislator Lin Cho-shui (林濁水) recently. This is no doubt because of his view that economic growth is more important than unemployment.

But economic growth does not necessarily entail the creation of new jobs. When economic growth fails to relieve unemployment, it is known as jobless growth. This has been the case in the Taiwan. Even though the nation's overall economic growth has been reasonably good, unemployment has not declined significantly and income disparity has increased.

To a certain extent, jobless growth and income disparity have been caused by policies encouraging capital and technology-intensive industries to develop.

Data shows that in 1986, GDP growth was directly related to the creation of new jobs. For each percentage point of GDP growth, the rate of employment increased by 0.38 percent. In the 1990s, the corresponding employment increase fell to just 0.19 percent. Now, it would seem to be even lower.

In his new book Community: Taiwan Under the Sign of the World, Lin examines economic issues in the context of globalization and the US-China-Taiwan IT supply chain. This approach leads him to see jobless growth as being inevitable.

While Lin's approach is interesting, Taiwan's options are not limited to jobless growth.

In 1998, a Chinese Academy Of Science task force made a number of policy recommendations in a study entitled "Employment and Development: The Chinese Unemployment Question and Employment Strategies."

These recommendations included making lower unemployment rates an economic policy objective at every level of government.

Lin -- and the entire DPP administration for that matter -- should think carefully about the academy's recommendation to make low unemployment a top priority.

But the government has never really made employment its top economic priority. The technocrats who oversaw the economy under the KMT believed that growth solved all problems, and the DPP thinks the same way now. The reality though is that income disparities are widening unacceptably for any democratic government. The DPP began its rise to power as a champion of the poor and cannot continue to allow the rich-poor gap to widen.

The overseers of a nation's economy should balance economic growth and market efficiency with equitable distribution.

The DPP leadership must not fall into the trap of "economic development first" -- the credo of the KMT's economic planners. Instead, they should take the issue of economic justice seriously.

In 2001, US President George W. Bush was received by late pope John Paul II, who asked Bush to narrow the world's enormous rich-poor gap.

At the end of that same year, a group of US religious leaders of different faiths delivered a joint statement to the US government demanding global economic justice and proclaiming five major principles. These included demanding that international trade and investment systems not violate the dignity of the human person, protecting the most vulnerable and opening negotiations and decision-making to to those most affected by them.

The statement also called for world trade that respects civil society and the right of local communities to pursue sustainable development of their resources.

Greed is the essence of capitalism. If Lin had thought about this more seriously, his vision of the nation would have been a more equitable one.

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