President Ma Ying-jeou’s (馬英九) recent remarks that the nation’s wealth divide is one of the world’s smallest demonstrate that he is still more focused on numbers than the real financial challenges that ordinary workers and families face.
Addressing a small and medium-sized enterprise conference on Oct. 28 in Taipei, Ma said that last year the average annual disposable income of the top 20 percent of the nation’s households was 6.08 times greater than that of the bottom 20 percent, an improvement from the 6.39 times recorded in 2001.
Ma said at the conference that the difference in average incomes earned by the top 20 percent of individuals and the bottom 20 percent had narrowed steadily since 2001 to 4.08 times last year, with the Gini coefficient — a commonly used measure of inequality — reaching 0.336 last year, the lowest level seen in more than a decade, according to data compiled by the Directorate-General of Budget, Accounting and Statistics (DGBAS).
A Gini coefficient of zero indicates complete equality of income, while a figure of 1 indicates complete inequality. Taiwan’s Gini coefficient of 0.336 for last year is in the middle of all nations surveyed in the Institute for Management Development’s annual global competitiveness survey and, of course, Ma likes to claim that narrowing the income gap is one of his administration’s most significant achievements.
However, the problem is that official statistics fail to accurately reflect the actual distribution of incomes in the nation. Even more alarming is that official statistics cannnot reveal the real concentration of wealth in the hands of the rich, who also earn income from property or stock sales.
The growing concentration of wealth in the hands of the few also reflects a nation that has been laboring with sluggish economic growth and stagnant wages for many years, as DGBAS statistics indicate that wages have accounted for a declining share of the nation’s GDP over the past 20 years, in contrast with corporate earnings, which have seen an increasing contribution during the same period. Last year, employee wages constituted only about 45 percent of GDP — one of the lowest levels in the world.
In addition, from 1992 to 2012, the contribution of wages to GDP decreased by 5.5 percent, in comparison with a 3.7 percent gain in corporate earnings over the same period, suggesting that an increasing proportion of Taiwan’s growth in GDP has gone to wealthy corporate shareholders rather than to employee salaries.
So, when Ma repeatedly claims that the nation’s economy is recovering, one has to ponder what recovery he is alluding to, why wages remain flat after almost 15 years and whether the economy is working for the interests of the majority, or for the wealthy elite and big business.
On the other hand, a growing wealth gap is part of an international trend. Earlier this month, the World Economic Forum released a report saying that rising income inequality and unemployment would be the top challenges facing global leaders next year, while Credit Suisse said in its annual global wealth report last month that global wealth inequality has increased since 2008, with the wealthiest 1 percent of the world’s population possessing 48.2 percent of global wealth, up from the 46 percent last year. The bottom half of people hold just 1 percent of global wealth, by comparison.
The increase in the wealth divide is now a global issue and the situation in Taiwan reflects this, with the issue threatening national competitiveness and social stability. After gaining international attention with his controversial book Capital in the Twenty-First Century, published last year to address the issue of income inequality, French economist Thomas Piketty was due to visit the nation for the first time yesterday.
It will be interesting to know what his thoughts on the issue are with respect to Taiwan, especially during the current period of weak economic growth.
Taiwan’s status in the world community is experiencing something really different; it’s being treated like a normal country. And not just a “normal” country, more like a valuable, constructive, democratic and generous country. This is not simply an artifact of Taiwan’s successes in combatting the novel coronavirus. It is a new attitude, weighing Taiwan’s democracy against China’s lack of it. Before I continue, I should apologize to the readers of the Taipei Times. I have not visited Taipei since the opening of the American Institute in Taiwan’s new chancery building in Neihu last year, so I was unprepared for the photograph
On Sept. 27, 2002, the Democratic Republic of Timor-Leste (East Timor) joined the UN to become its 191st member. Since then, two other nations have joined, Montenegro on June 28, 2006, and South Sudan on July 14, 2011. The combined total of the populations of these three nations is just more than half that of Taiwan’s 23.7 million people. East Timor has 1.3 million, Montenegro has slightly more than half a million and South Sudan has 10.9 million. They all are members of the UN, yet much more populous Taiwan is denied membership. Of the three, East Timor, as a Southeast Asian
At a June 12 news conference held by the Talent Circulation Alliance to announce the release of its white paper for this year, President Tsai Ing-wen (蔡英文) emphasized that, in this era of globalization, Taiwan should focus on improving foreign language and digital abilities when cultivating talent, so that it stands out from global competitors. I suggest the government should consider building a professional translation industry. If the public believes that there is a relationship between learning English and national competitiveness, then the nation must consider the social cost of language education. This should be assessed to maximise educational effectiveness: Is
Taiwan has for decades singlehandedly borne the brunt of a revanchist, ultra-nationalist China — until now. Ever since Australian Prime Minister Scott Morrison had the temerity to call for a transparent, international investigation into the origins of the COVID-19 pandemic, Beijing has been turning the screws on Canberra. This has included unleashing aggressive “wolf warrior” diplomats to intimidate Australian policymakers, enacting punitive tariffs on its exports, and threatening an embargo on Chinese tourists and students to the nation. A tense situation became more serious on June 19 after Morrison revealed that a “sophisticated state-based actor” — read: China — had launched a