The Liberty Times Editorial: Salary slip highlights pay divide

Tue, May 24, 2011 - Page 8

On May 12, Central Personnel Administration Minister Wu Tai-cheng (吳泰成) made a slip of the tongue during a legislative question-and-answer session when he said that military personnel, civil servants and public school teachers earn low to mid-level incomes. The claim has caused much public controversy, and Wu has been criticized for not understanding the public’s hardships and trying to portray the government’s vote-buying policy of raising the salaries of military personnel, civil servants and school teachers by 3 percent in a better light.

In response to the criticism, Wu quickly issued a statement saying that his comments were rash and that he had oversimplified the issue. He also apologized if his comments had been the cause of any misunderstanding.

Whether oversimplified or just a slip of the tongue, Wu’s claim reflects the general attitude of government officials. The income, employment benefits and retirement pension received by military personnel, civil servants and school teachers are in fact better than those of salaried employees.

However, just like President Ma Ying-jeou (馬英九), most officials have risen through the ranks of the civil service. They are isolated and out of touch with the world around them, thinking they are a disadvantaged group and that if the government doesn’t give them special treatment, they are not showed the appreciation due to them for their contributions to the nation. Taiwan’s current economic data may appear superficially outstanding, but most workers have not shared in the results. Apart from wanting to attract votes in next year’s elections, another reason for the 3 percent raise for government employees is the misconception that military personnel, civil servants and school teachers belong to the lower and middle classes.

There is in fact a very simple number that will tell us if these groups really belong to the lower and middle income levels. According to Wu, the average monthly salary of civil servants is about NT$60,000. However, data from the Directorate-General of Budget, Accounting and Statistics tells us that anyone with a monthly salary of NT$60,000 belongs to the upper income levels, because almost half of Taiwan’s almost 8 million salaried employees — including civil servants — earn less than NT$30,000 per month, and less than 10 percent of them earn more than NT$60,000 per month.

In addition, the average monthly pay for salaried employees, excluding civil servants, was NT$36,000 last year, far less than the NT$60,000 average earned by civil servants.

Among them, 1.038 million people, or 12.9 percent, earned less than NT$20,000 per month and 3.597 million people, 44.6 percent, earned less than NT$30,000. Only 716,000 people, 8.9 percent, earned more than NT$60,000 per month. In other words, it is those among Taiwan’s salaried employees who earn less than NT$30,000 per month who earn a low or mid-level income. Those making NT$60,000 or more per month belong to the top 10 percent, the upper level of Taiwan’s salary earners.

We are not criticizing Wu for highlighting the income gap between military personnel, civil servants and school teachers on the one hand and the general public on the other, nor are we trying to stir up hatred between different groups. Government employee salaries and benefits are a result both of historical factors and long-term policy, and not an intentional attempt to form a privileged class superior to a majority of the public. Our point is that most government officials are unaware of the public’s hardships, living as they do in their own little world, making their decisions in their ivory towers, and that they do not know that most salaried employees will never earn the NT$60,000 government employees earn every month.

They are probably also unaware that although the government brags about outstanding economic growth last year, the average monthly salaries for local workers regressed to the income levels of 13 years ago. Obviously, they are also unaware that 44.6 percent of all salaried employees earn less than NT$30,000 per month.

Even more seriously, an in-depth look shows that although Ma brags his pro-China policy has ended the “isolation” caused by former president Chen Shui-bian’s (陳水扁) government and will bring a pro-Chinese “golden decade” of prosperity to Taiwan, Ma’s policy will push Taiwanese workers into a hopeless situation from which they may never recover.

The fact is that all the troubles of Taiwanese workers originate with China. Since it launched its reform and opening policy in 1978, China has provided the world with hundreds of millions of cheap workers. This happened just in time for China to provide the base for the Taiwanese traditional manufacturing industry as it moved out of Taiwan when the New Taiwan dollar appreciated and salaries exploded in the 1990s. It was after this that Taiwan experienced its first wave of diminishing employment opportunities and falling salaries.

Luckily, high-tech industry replaced the traditional manufacturing industry, filling some of the space left by their relocation. Still, Taiwan’s high-tech industry focuses mainly on original equipment manufacturing and is easily replaced by China. Once some sectors decide to relocate, it will be difficult for other sectors not to follow. Eventually, the whole production chain will be relocated, and countless job opportunities will be lost. Based on the restrictions described by factor-price equalization theory, Taiwan would be lucky to keep salaries at their current, stagnated level, but further wage declines are foreseeable due to lower Chinese labor costs.

There is no doubt that the salary for military personnel, civil servants and school teachers was much lower than in the private sector 20 years or 30 years ago, and that’s when the impression that these groups have low to mid-level incomes was formed. However, over recent years, Taiwanese enterprises have moved to China, causing Taiwanese salaries to remain stagnant and even fall while the salaries of government employees, protected by the system and election concerns, have grown steadily and turned them into the new upper class.

The purpose of reform is not currently to cut salaries of military personnel, civil servants, and school teachers. Instead, it is to lift the stagnant salaries of Taiwanese workers. That is how we must create social justice and allow more Taiwanese to share in the results of economic growth through pay hikes. To reach this goal, the most urgent task is to bring an end to the pro-China policies that hold salaries back and to stop Taiwan’s economy from leaning too far toward China. That is the only way to create hope for the future of Taiwanese workers.