Tue, May 24, 2011 - Page 8 News List

The Liberty Times Editorial: Salary slip highlights pay divide

They are probably also unaware that although the government brags about outstanding economic growth last year, the average monthly salaries for local workers regressed to the income levels of 13 years ago. Obviously, they are also unaware that 44.6 percent of all salaried employees earn less than NT$30,000 per month.

Even more seriously, an in-depth look shows that although Ma brags his pro-China policy has ended the “isolation” caused by former president Chen Shui-bian’s (陳水扁) government and will bring a pro-Chinese “golden decade” of prosperity to Taiwan, Ma’s policy will push Taiwanese workers into a hopeless situation from which they may never recover.

The fact is that all the troubles of Taiwanese workers originate with China. Since it launched its reform and opening policy in 1978, China has provided the world with hundreds of millions of cheap workers. This happened just in time for China to provide the base for the Taiwanese traditional manufacturing industry as it moved out of Taiwan when the New Taiwan dollar appreciated and salaries exploded in the 1990s. It was after this that Taiwan experienced its first wave of diminishing employment opportunities and falling salaries.

Luckily, high-tech industry replaced the traditional manufacturing industry, filling some of the space left by their relocation. Still, Taiwan’s high-tech industry focuses mainly on original equipment manufacturing and is easily replaced by China. Once some sectors decide to relocate, it will be difficult for other sectors not to follow. Eventually, the whole production chain will be relocated, and countless job opportunities will be lost. Based on the restrictions described by factor-price equalization theory, Taiwan would be lucky to keep salaries at their current, stagnated level, but further wage declines are foreseeable due to lower Chinese labor costs.

There is no doubt that the salary for military personnel, civil servants and school teachers was much lower than in the private sector 20 years or 30 years ago, and that’s when the impression that these groups have low to mid-level incomes was formed. However, over recent years, Taiwanese enterprises have moved to China, causing Taiwanese salaries to remain stagnant and even fall while the salaries of government employees, protected by the system and election concerns, have grown steadily and turned them into the new upper class.

The purpose of reform is not currently to cut salaries of military personnel, civil servants, and school teachers. Instead, it is to lift the stagnant salaries of Taiwanese workers. That is how we must create social justice and allow more Taiwanese to share in the results of economic growth through pay hikes. To reach this goal, the most urgent task is to bring an end to the pro-China policies that hold salaries back and to stop Taiwan’s economy from leaning too far toward China. That is the only way to create hope for the future of Taiwanese workers.

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