A survey published recently by the Directorate-General of Budget, Accounting and Statistics revealed that, as of May this year, 42 percent of employees in Taiwan earned monthly salaries of less than NT$30,000. The true situation may be even worse, because the term “employees” includes several tens of thousands of Taiwanese who work in China — whose monthly salaries tend to be higher than those in Taiwan — so the proportion of working poor among people employed in Taiwan is probably much higher than 42 percent.
The question is: Why are there so many “working poor”?
“Because of the effects of the global financial crisis” — this is the stock response from government officials. However, the situation is not so grim in neighboring countries, although they were all hit by the same financial tsunami. Taiwan’s opposition parties and media commentators all blame the incompetence of President Ma Ying-jeou (馬英九) and his administration, but it was not during Ma’s presidency that salaries stopped growing — they have been at a standstill since 2000. It is just that the problem has become even worse under the Ma government. If you are looking for the real reasons for this, the following figures are to provide an answer.
The first point is that, whereas Taiwanese manufacturers did 12.24 percent of their manufacturing overseas in 1999, that figure grew to 46.23 percent by 2007, with 90.9 percent of offshore production done in China. By last year, the figure had climbed to 50.52 percent, with 92.7 percent of production abroad concentrated in China. After Taiwan’s first handover of government power from the Chinese Nationalist Party (KMT) to the Democratic Progressive Party (DPP) in 2000, the administration of then-DPP president Chen Shui-bian (陳水扁) abandoned his KMT predecessor, former president Lee Teng-hui’s (李登輝) “no haste, be patient” policy with regard to investment in China, allowing Taiwanese manufacturers to quickly move their operations across the Taiwan Strait. This relaxation of Taiwan’s cross-strait policies led to an exodus of manufacturers on a scale that no other country has ever seen.
Second, it is true that moving production lines overseas got Taiwanese manufacturers out of a tight spot as regards competitiveness. This is confirmed by operating profits for listed Taiwanese companies growing 200 percent between 1998 and last year, while their net profits after tax shot up 400 percent. However, the threat of factory closures locally left workers with no choice but to put up with a situation in which their real wages fell and their employers could demand anything they wanted of them. From that time on, workers’ share of GDP has been falling steadily, from about 50 percent of GDP 10 years ago to a record low of 44.5 percent in 2010. Ironically, Taiwan’s low wages are one of the reasons why the country is listed among the world’s most competitive economies in the International Institute for Management Development’s world competitiveness rankings.
The third point is that while Taiwanese manufacturers have spent more than a decade chasing cheap labor in China, they have paid scant attention to research, development and innovation. The overall value-added rate for the Taiwanese manufacturing industry as a whole slid from 26.3 percent in 2000 to 21.3 percent in 2010 — the biggest drop in Asia. This has canceled out any competitive edge arising from the low wages paid to workers in Taiwan and as companies’ competitiveness falls, wages cannot go up.
With so many people stuck in the “working poor” bracket, it is hardly surprising that young Taiwanese feel hopeless about their future. The blame for this situation lies with the government, or rather governments — including both the Chen and Ma administrations — which have failed to come up with sufficient complementary policies to shore up Taiwan’s industrial foundations. Instead, they have only listened to the opinions of corporations and they have blindly given manufacturers free rein to move to China, and even encouraged them to do so for the sake of “economic integration.”
The sad thing is that those who wield power and influence, no matter whether they belong to the governing party or opposition parties, still have no intention of telling the public the real reasons for wage stagnation in the country. All they do is dodge the issue by blaming each other and squabbling about things like Ma’s pledge to achieve 5 percent economic growth, while getting unemployment down to 4 percent and seeing wages rise by 3 percent.
Their attitude is the most miserable thing about the working poor’s sorry situation.
Huang Tien-lin is a former presidential adviser.
Translated by Julian Clegg
Having lived through former British prime minister Boris Johnson’s tumultuous and scandal-ridden administration, the last place I had expected to come face-to-face with “Mr Brexit” was in a hotel ballroom in Taipei. Should I have been so surprised? Over the past few years, Taiwan has unfortunately become the destination of choice for washed-up Western politicians to turn up long after their political careers have ended, making grandiose speeches in exchange for extraordinarily large paychecks far exceeding the annual salary of all but the wealthiest of Taiwan’s business tycoons. Taiwan’s pursuit of bygone politicians with little to no influence in their home
In 2025, it is easy to believe that Taiwan has always played a central role in various assessments of global national interests. But that is a mistaken belief. Taiwan’s position in the world and the international support it presently enjoys are relatively new and remain highly vulnerable to challenges from China. In the early 2000s, the George W. Bush Administration had plans to elevate bilateral relations and to boost Taiwan’s defense. It designated Taiwan as a non-NATO ally, and in 2001 made available to Taiwan a significant package of arms to enhance the island’s defenses including the submarines it long sought.
US lobbyist Christian Whiton has published an update to his article, “How Taiwan Lost Trump,” discussed on the editorial page on Sunday. His new article, titled “What Taiwan Should Do” refers to the three articles published in the Taipei Times, saying that none had offered a solution to the problems he identified. That is fair. The articles pushed back on points Whiton made that were felt partisan, misdirected or uninformed; in this response, he offers solutions of his own. While many are on point and he would find no disagreement here, the nuances of the political and historical complexities in
Taiwan faces an image challenge even among its allies, as it must constantly counter falsehoods and misrepresentations spread by its more powerful neighbor, the People’s Republic of China (PRC). While Taiwan refrains from disparaging its troublesome neighbor to other countries, the PRC is working not only to forge a narrative about itself, its intentions and value to the international community, but is also spreading lies about Taiwan. Governments, parliamentary groups and civil societies worldwide are caught in this narrative tug-of-war, each responding in their own way. National governments have the power to push back against what they know to be
RSS