Hundreds of thousands of people took to the streets to protest against declining living standards last Saturday. On Tuesday, media reports claimed the government was planning to cut the number of foreign workers in response to the protests. The government denied the existence of such a plan on Wednesday, but admitted that key officials were discussing the possibility of cutting foreign workers to help create jobs for locals.
Given the high unemployment rate and feelings of economic uncertainty, if officials continue with empty rhetoric about stimulating domestic demand through consumption, then they are either out of their minds or else trying to emulate Emperor Hui (惠帝) of the Jin Dynasty — remembered for causing great suffering by not understanding the needs of his people.
More than 400,000 foreign workers are employed in Taiwan at this time, crowding out job opportunities for local workers. This is a vicious foreign labor policy bequeathed to us by the former government. But the current government would be insensitive and incompetent if it does not alter it as soon as possible.
Let us look back at the severe oil crisis and global economic downturn that president Chiang Ching-kuo (蔣經國) faced in the 1970s. Chiang’s government launched the “10 Major Construction Projects” to enable the unemployed in the low and middle-income categories to find jobs.
Companies also profited from participation in public construction projects and were able to invest in other ventures with the earnings. Since there were no foreign laborers at that time, the capital that the government invested in these projects entirely benefited local workers.
Then, with steady incomes, these workers were able to engage in demand-driven consumption, which covers food, clothing, housing, transportation and entertainment. The economic benefits are even more obvious when viewed in light of the investment multiplier effect.
Today, many college and university students are thrown into a position of unemployment as soon as they graduate, while workers in all age groups are being retrenched in larger numbers. Since it is difficult to find a job at the moment, suicide is increasing among the poor and the sick as a way to escape the hardship of life.
Surprisingly, at the end of July, there were 370,000 foreign laborers here. If we add the 80,000 or so foreign workers who run away from their jobs, we conclude that there are around 450,000 jobs occupied by foreign workers. No wonder countless local workers are forced into unemployment.
For each foreign worker who earns NT$240,000 per year, an average of at least NT$150,000 is remitted to his or her home country. Thus, Taiwan is losing NT$67.5 billion (US$2.1 billion) in domestic disposable income annually. The total loss since Taiwan began to import significant numbers of foreign workers in 1993 is without doubt an enormous figure. This is an example of how a flawed production-consumption mode can adversely affect government policy.
I suggest that the government amend the Labor Standards Law (勞基法) and its foreign labor policy in a timely manner. This would make the private sector more willing to hire local workers and would provide more job opportunities.
With stable jobs and incomes, the public would be more than happy to spend. This would greatly assist in the nation’s economic recovery.
Alex Jeo is a former convener of the social-economic team of the Taiwan Association of University Professors.
TRANSLATED BY EDDY CHANG
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