According to statistics released by the Directorate-General of Budget, Accounting and Statistics on May 22, the average monthly salary in the first quarter of the year was NT$54,897 and the “real” average monthly earning was NT$53,689, a return to the level of 1997. If we exclude all non-regular earnings, such as bonuses, the figures are likely to decline even further.
In mid-April, Premier Jiang Yi-huah (江宜樺) said that Taiwan’s economy has stagnated. He said that the main reasons for the weak economy were low private consumption and weak exports. In particular, the government had been concerned with the low private consumption, which caused economic growth to decline in the first quarter of the year.
The economic system consists of households, businesses and the government, and its performance depends on the interaction between these three parties. It is only when businesses are willing to share their profits with households that private consumption will increase, at the same time increasing government tax revenues.
As the government uses its tax revenue to improve the industrial environment, it will create an external effect that adds value to businesses. It is only through this kind of positive relationship that Taiwan will be able to boost its economy.
It is a pity that this kind of positive cycle does not exist in Taiwan at the moment. Judging from the stagnation of salaries in recent years, the growth of real regular wages has not matched that of real GDP.
Looking at the figures for 1991 for example, the growth of real regular wages in the industrial and service sectors was about 7 percent, which was about the same as real GDP, which also increased by about 7 percent over the same period.
However, in 1994, real regular salary growth in the industrial and service sectors was below 2 percent, while real GDP grew by more than 6 percent. In other words, businesses have failed to share the fruits of economic development with their employees in recent years. Perhaps this is why the public has a stronger sense of economic stagnation than entrepreneurs.
During an interview with the Nihon Keizai Shimbun early last month, Harvard Business School dean Nitin Nohria said that when businesses become greedy, society will be unable to benefit from them. People will then demand that the government put pressure on businesses, with the result that the government might implement certain restrictions on businesses.
This is a destructive relationship in which the three parties — households, businesses and government — attack one another. Once such an atmosphere develops, the economy is likely to enter a vicious cycle.
Judging from the current atmosphere in Taiwan, it seems that we are moving toward this dead end.
Fortunately, some businesses have started to pay attention to the problems facing salaried employees recently, calling on enterprises to give our young people more opportunities.
If their call can bring interaction among households, businesses and government to a positive cycle, there would be light at the end of the tunnel for Taiwan’s economy.
If that does not happen, any new policies will be affected by the current destructive relationship and the result will be that we will have to work twice as hard for half the benefit.
Chen Chien-yin is a researcher at the Industrial Technology Research Institute’s Center of Knowledge-based Economy and Competitiveness.
Translated by Eddy Chang
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and
As former president Ma Ying-jeou (馬英九) wrapped up his visit to the People’s Republic of China, he received his share of attention. Certainly, the trip must be seen within the full context of Ma’s life, that is, his eight-year presidency, the Sunflower movement and his failed Economic Cooperation Framework Agreement, as well as his eight years as Taipei mayor with its posturing, accusations of money laundering, and ups and downs. Through all that, basic questions stand out: “What drives Ma? What is his end game?” Having observed and commented on Ma for decades, it is all ironically reminiscent of former US president Harry