One day after President Ma Ying-jeou (馬英九) announced a big program to tackle unemployment, Premier Liu Chao-shiuan (劉兆玄) said that the government expects to see 456,000 jobs created over the next four years. Can so many jobs really be conjured up so easily? If so, Taiwan would become a model for other countries facing rising unemployment. The likely result is that this is going to be another bounced check from the Ma administration.
The Council for Economic Planning and Development says that the budget earmarked for boosting the economy and expanding public infrastructure will be increased by NT$80 billion (US$4.2 billion) to NT$500 billion. The program is intended to promote employment in the short term and to increase and expand public infrastructure projects in the medium to long term. The Council of Labor Affairs (CLA), which has already offered to subsidize businesses to take on 15,000 unemployed people under its “immediate-start work plan,” is offering to fund more such placements if there is sufficient demand.
The Cabinet produces these figures by anticipating that 50,000 jobs a year can be created from next year to 2012 for a four-year total of 200,000, plus 56,000 short-term jobs, plus 200,000 public construction jobs, which all add up to the impressive figure of 456,000.
The problem lies with the idea that 50,000 new jobs can be created each year starting next year. While the government can provide vocational training for that number of people, there is no way of knowing how many of these traineeships will turn into real jobs. Wage subsidies and public service projects can only generate short-term employment.
The government would be doing well if it could keep finding jobs for 50,000 people after the first year. The idea that 200,000 job opportunities could be created over four years is fanciful under the circumstances.
The same can be said about the CLA’s “immediate-start work plan.” The Chinese National Federation of Industries has called on companies to support the plan by taking on 5,000 unemployed workers. However, even with subsidies on offer for companies that join the scheme, the results have been disappointing. Only a handful of people have found placements under the scheme since it was launched two months ago because businesses don’t need these workers right now.
Former president Chen Shui-bian’s (陳水扁) government tried a similar plan, launching a NT$20 billion public service employment expansion program in 2003 to create 100,000 jobs. But most of those employed under the scheme ended up sitting idle in local government agencies. The policy wasted taxpayers’ money, embarrassed those who were “hired” and failed to accomplish its goal. Chen’s government also expanded its public infrastructure program from NT$300 billion over three years to NT$500 billion over five years. Thanks to frequent Cabinet reshuffles and poor implementation, however, the program fizzled.
With the current economic downturn, unemployment is a major concern. Government economic plans must be based on realistic assessments. Slogans, financial sleight-of-hand and quack remedies will not save the day. Ma already has a dismal record in meeting his campaign promises; he shouldn’t rush into another failure.