Wed, Sep 12, 2012 - Page 8 News List

Innovating to eradicate poverty

By Lee Wo-chiang 李沃牆

The gap between the rich and the poor has been around a long time and it is something that countries around the globe are still struggling with. The Directorate-General of Budget, Accounting and Statistics (DGBAS) recently released its annual “Survey of Family Income and Expenditure” report, which showed that last year, the average yearly household income for the nation’s 7,959,800 households was NT$1.158 million (US$39,000). The top 20 percent had a yearly disposable income of NT$1.827 million, while the bottom 20 percent had only NT$296,000. This translates into a 6.17-times difference in disposable income between the top and the bottom quintiles, a slight drop compared with two years ago.

However, the average negative savings, or debt, among the 20 percent lowest income earners reached NT$29,308, an increase of NT$8,783 from 2010. If we were to add in the central government debt per capita of almost NT$210,000, these figures would be truly discouraging. According to the DGBAS, part of the reason for the negative savings rate over the past five years is the head of the family often lives off previous savings or pension payments after retirement. However, a closer look shows that other factors, such as years of stagnant salaries, a rising unemployment rate and soaring consumer prices, are also to blame.

Objectively speaking, the wealth gap has become a cliche. It exists in every country, and it is an especially serious problem in China. It is not very surprising, then, that the issue has been heavily politicized by populists. The government must not only concentrate on the “old poor” among low-income earners or those who live on the poverty line; it must also pay attention to the “new poor,” also referred to as the “working poor.” The old poor refers to a minority of disadvantaged individuals who are unable to find employment due to age, disability or sickness, while the new poor refers to people affected by structural unemployment or unstable employment as a result of structural economic changes. It has been estimated there are approximately 2.1 million of these marginalized workers without any formal employment.

The new poor are not unemployed and they do not belong to low-income families. They face another form of poverty because the government has largely ignored their plight. Apart from the old poor and the new poor, there is also a group referred to as the “busy and poor” (窮忙族): those who earn less than NT$30,000 per month. According to the DGBAS’ “Manpower Utilization Survey” last year, almost 30 percent of office workers — or more than 2.26 million people — receive an average monthly salary of less than NT$25,000, while about 40 percent — or 3.6 million people — receive less than NT$30,000. These figures show that the group of working poor is increasing as a result of low pay, and their dissatisfaction is a great worry for society.

Indian independence leader Mahatma Gandhi once said: “Poverty is the worst form of violence.”

Poor people have the right to improve their lives and the government should be duty-bound to do so. However, eradicating poverty does not only require effective measures designed for specific problems; innovative thinking is also necessary.

Late Inventec vice chairman Sayling Wen (溫世仁), who spent a lot of effort trying to reduce poverty among farmers, said: “Poverty reduction offers a huge market.”

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