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Highest, lowest earning segments grow: DGBAS

The nation moved further toward becoming an M-shaped society last year, with the segments of the population earning the highest and lowest incomes growing to new highs, a recent report released by the Directorate General of Budget, Accounting and Statistics (DGBAS) showed.

The report, issued on Tuesday, said that the number of individuals with an annual income of at least NT$2 million (US$63,091) broke the 100,000 mark for the first time last year to hit a record 101,554.

On the other hand, the number of individuals who earned less than NT$200,000 last year reached a five-year high of 1.23 million, the DGBAS report said.

While only 0.8 out of every 100 local residents earned NT$2 million or more last year, the number of those in this “wealthy club” increased by 11,308, or 12.5 percent, from the year-earlier level.

Meanwhile, 7,072 more people had annual incomes of less than NT$200,000 than the previous year, a 0.5 percent year-on-year rise. It marked the second consecutive year that the number of people in the group earning the lowest incomes had increased.

A DGBAS official said that the growing gap between rich and poor is a worldwide trend and that Taiwan was no exception.

When Taiwan’s 7.41 million households were divided into 10 tiers based on annual income last year, the richest 740,000 households had an average disposable income of about NT$1.67 million, roughly 5.2 times the NT$320,000 average disposable income of the bottom 740,000 households, the official said.

“The gap was the third highest, second only to 2001when [the highest] was 5.33 times [the lowest] and 2002 and 2006 when it was 5.25 times,” the official said.

The concept of an “M-shaped society” was first proposed by Japanese business strategist and writer Kenichi Ohmae in 2006. He argued that income distribution in many societies around the world had become “M-shaped.”

In a well-developed modern society, he said, income segments form a “normal distribution” pattern, and the middle class forms the bulk of the society.

In an “M-shaped society,” however, the middle class gradually disappears, Ohmae said.

A few people in the middle class might climb the ladder and squeeze into the upper class, while others gradually sink into the lower classes.

These people experience a deterioration in living standards, facing the threat of unemployment or a decline in their average income.
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