Taiwanese have been struggling financially for years, with soaring housing prices and the lowest real monthly wages in almost two decades, which have aroused public anger and social unrest, including the recent occupation of Legislative Yuan.
The government needs to come up with new economic stimulus measures, including initiatives to encourage corporations to raise salaries and more public housing programs. However, it appears that President Ma Ying-jeou (馬英九) does not feel the same pressures as the average Taiwanese.
He talks broadly about remedies, but has not put any substantial measures into action or provided a clear vision for the future for the younger generation. He simply regurgitates the same platitudes and promises, as he demonstrated yesterday in a speech at China Medical University in Greater Taichung.
Ma claims to have helped raise salaries, saying that as of this year, the government has increased the minimum monthly salary for six straight years. The minimum wage has risen 11 percent — to NT$19,273 — in that time, but those increases do not have a direct link to, or boost the real average pay. That has remained frozen — for 16 years — at NT$63,103 for the first two months of the year.
An accrued 17.58 percent inflation rate over those 16 years has entirely eroded what little growth the nation has seen, according to Directorate-General of Budget, Accounting and Statistics figures, meaning there has been a 2.53 percent reduction from the average wage of NT$64,738 earned in 2008. While the nation’s GDP has grown 2.91 percent on average over the past six years, there has been no trickle-down effect.
One way to boost real wages is to encourage corporations to raise their payrolls by sharing more profits with employees. To quickly achieve this goal, the government should provide initiatives such as tax breaks to companies that regularly raise their employees’ paychecks by more than 3 to 5 percent a year. If the public is forced to wait to see a substantial hike in salaries until after local industries upgrade themselves into more value-added and innovative businesses — as the government encourages them to do — wage earners will be waiting a long time.
Ma yesterday said he plans to speed up efforts to help younger couples own their own homes, or at least to rent an apartment. Yet he offered no ideas for providing substantial amounts of affordable housing, except those projects already in the works — such as boosting the number of social housing units for rent in Taipei from the current 7,000 to 10,000 by 2017 and building 10,000 units in Taipei that will be sold for 30 percent less than current market prices — and he did not mention reducing skyrocketing real-estate prices or address housing woes in other parts of the nation.
Ma told his audience that the government has made strides in curbing housing speculation and preventing the property bubble from bursting, citing the move to require real-estate buyers and brokers to register their transactions by market value. That policy has been in place since October 2012, but it has not curbed the continuing escalation in real-estate prices.
As of the end of last year, rising prices had pushed housing costs to 8.37 times the average income, from 6.25 times in the second quarter of 2008. In Taipei, property prices have soared more than 50 percent to NT$829,800 per ping (3.3m2). Taipei is the world’s most expensive city in terms of house-to-income ratio, which, according to Ministry of the Interior statistics, stood at 15.01 in the fourth quarter last year.
Two years into his second term, Ma and his government have yet to come up with effective measures to improve the nation’s economy, reverse the steady decline in real wages or curb surging real-estate prices. It is almost unimaginable that they will be able to do so in the last two years of his term.
The nation would have been better served if Ma had offered an apology yesterday, not more placebos.
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