Fri, Jul 15, 2011 - Page 8 News List

The Liberty Times Editorial: The truth about unemployment

A few days ago in a meeting with Anti-Poverty Alliance members, President Ma Ying-jeou (馬英九) said that over the past three years, thanks to the efforts made by various sectors, 380,000 new job opportunities had been made available and the unemployment rate had fallen to 4.27 percent as of May. Ma admitted that more than 400,000 people are still out of work. He also said the fact that many traditional and high-technology manufacturers are complaining about worker shortages means that there is still much room for improvement in matching job seekers with vacancies.

Is the unemployment problem Taiwan now faces really, as Ma said, just a matter of matching people up to jobs? Actually, the real problem is somewhat different, and involves realities Ma is not willing to admit.

The unemployment rate has declined a little recently, but the main reason for this is not that there are more jobs, but that many long-term unemployed people have given up looking for jobs and are not included in the official jobless figures. Another factor is that the government has launched various short-term employment programs, which have had a cosmetic effect on the joblessness statistics.

Experience tells us that a real increase in the number of jobs is always signaled by better salary offers to attract new recruits. In Taiwan, however, the real incomes of working people have not gone up. Instead, they have fallen back to where they were a decade or more ago. This shows that the job market in Taiwan is fundamentally different from the way Ma describes it. The clearest illustration of this is the high overall unemployment rate for college graduates, and that their average starting salary, when they do find jobs, is about NT$25,000 a month.

On July 4, Bloomberg carried a report headlined “Taiwan jobs sucked to China by failure to mimic Singapore economic model” (“Taiwan continues to flounder as China sucks up all the jobs,” July 7, page 9). The report said that while many Taiwanese factories had moved offshore, Taiwan had not responded by developing new growth industries, as Singapore had done. It said Taiwan’s 4.4 percent unemployment rate, while less than half that of the US, compared unfavorably to competitor economies in the Asia-Pacific region, being more than twice as high as Singapore’s (1.9 percent) and exceeding that of Hong Kong (3.5 percent) and South Korea (3.2 percent).

With regard to job opportunities moving abroad, the Bloomberg article cited data compiled by the Investment Commission showing that a single Taiwanese company, Hon Hai Precision Industry Co’s subsidiary Foxconn, employs more than 1 million people in China, while the total number of all manufacturing jobs in Taiwan as of May was 2.9 million.

The Bloomberg article came pretty close to identifying what people can see for themselves about the difficulties faced by Taiwan’s working class, but Minister of Economic Affairs Shih Yen-shiang (施顏祥), having read the article, not only failed to reflect on the government’s performance, but actually complained that the report was biased and looked at the development of Taiwan’s manufacturing industry from a negative angle.

Such a reaction is to be expected from the Ma government, because all its members, from Ma down, see Taiwan’s reliance on China as a magic formula for job creation. Notably, since signing the cross-strait Economic Cooperation Framework Agreement (ECFA) last year, they have all been boasting that Taiwan’s job market has improved a great deal. The Ministry of Economic Affairs even declared that there were 230,000 vacancies in the manufacturing and service sectors at the end of February, concluding that the job outlook must be pretty good.

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