Tue, Feb 12, 2019 - Page 14 News List

Why Taiwanese are so sensitive to price hikes

Customers buy food products marinated in soy sauce at an evening market in Taipei’s Neihu District in an undated picture.

Photo: CNA

A series of reports on food and drink vendors across the country raising prices have recently been circulating in domestic media, with everything from pork belly rice to hand-shaken drinks, pizza and fried chicken coming under the microscope.

It is difficult to think of another country in the world that places such a high degree of attention on price rises as Taiwan. The public’s acute sensitivity toward commodity prices is a result of virtual wage stagnation coupled with frequent commodity price rises, which has lead to a feeling of disenfranchisement among the public.

It might be difficult for non-Taiwanese to comprehend why news about food and drink price hikes should command so many column inches in Taiwanese newspapers and media outlets. Why is it that Taiwanese public opinion gets so het up over price increases of just NT$5 or NT$10, and why does the media feel it necessary to respond with almost blanket coverage? If consumers chose not to buy these products, would the impact really be that significant?

In fact, the impact would be huge. In recent years, the public has become very sensitive toward commodity prices, as in Taiwan everything goes up except for people’s salaries. This is especially true for consumers of food and beverages, since these purchases form a regular part of their daily lives. Consequently, any price hikes attract criticism and resentment.

According to data released by the Directorate-General of Budget, Accounting and Statistics, in November last year the average salary in Taiwan was NT$41,249, an increase of 2.56 percent on the previous year’s figure. Some commentators therefore argue that this comparison is unfair, since salaries have in fact increased, not stagnated.

So let’s take the 2.56 percent increase figure as an example. In Taiwan, food and drink prices are set in round numbers; as a result, every time prices increase, they rise by NT$5 or NT$10. So, if the retail price of a beverage rises from NT$40 to NT$45, this is equal to an increase of 12.5 percent, an increase much steeper than that of average salaries. Moreover, while average salaries may have increased, it remains true that a great many people’s salaries have not.

When contrasted with neighboring countries, domestic commodity prices are stable, nor does Taiwan have an inflation problem. Taiwan’s consumer price index has held steady at just over 1 percent. However, salaries and incomes have stagnated so that any increase to daily food and drink prices will naturally have a direct impact on people’s pockets. Suppose everyone’s salaries increased by 10 or 15 percent, would anyone still quibble about a NT$5 or NT$10 bump in the price of a drink or fried chicken?

(Translated by Edward Jones, Taipei Times)







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