Income disparity reached new highs in 2009, with the top 10 percent of wage earners making 28 times the salary of the lowest 10 percent — a trend that is accelerating — government statistics showed.
Data showed that the income share of the top 5 percent reached almost 75 times that of the bottom 5 percent, an increase from 65 times in 2008.
While average incomes dropped overall in 2009 following a global recession, the lower salaries disproportionately affected low-wage earners, with the bottom 10 percent making about 20 percent less than they did in 2008.
The lowest 10 percent earned an average of NT$99,000 (US$3,400) that year, comapred with NT$2.81 million for the highest 10 percent, who made about 13 percent less that year than in 2008.
Releasing the figures on Monday, the Ministry of Finance said the economic downturn had resulted in layoffs, factory closures and salary decreases, which had a negative impact mostly on middle and low-wage earners.
The ministry said long-term reasons for the income disparity trend included globalization and industrial restructuring.
Lawmakers analyzing the data said the government needed to adopt more measures to address growing income disparity, especially in light of price increases for everyday commodities.
“Even the [proposed] luxury tax doesn’t go far enough in addressing this issue,” Democratic Progressive Party (DPP) caucus whip Gao Jyh-peng (高志鵬) said, referring to a plan, tentatively set to come into force in July, to tax purchases of luxury automobiles and other goods, as well as crack down on property speculation.
DPP lawmakers said the government needed to help low--income earners before increasing pay raises for public servants.
“If we don’t address these problems, it will lead to social conflict between the haves and have nots,” DPP Legislator Lee Chun-yee (李俊毅) said.
In 2009, tax revenues came mostly from individual income tax, which accounted for 75 percent of government receipts. Capital gains from real estate and property trading accounted for 0.3 percent.
The jump in income disparity in 2009 was the largest in recent years, the ministry said. In 2006, the disparity between the top and bottom 10 percent and the top and bottom 5 percent was 24.21 times and 58.26 times respectively.
In 2009, the bottom 5 percent earned an average of NT$51,000, far below the minimum wage of NT$214,560 per year.
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