Unbridled inflation is eroding income. The Directorate General of Budget, Accounting and Statistics (DGBAS) said in a report yesterday that nominal wages, while edging up 1.66 percent year-on-year in the first four months of this year to NT$37,043, posted the biggest negative growth since 1980 in terms of real wages.
DGBAS said the real wage between January and April saw a 1.92 percent decline in growth while the Consumer Price Index (CPI) jumped 3.65 percent.
Census Bureau Deputy Director Huang Jiann-jong (黃建中) placed the blame on mounting inflation pressures at home and abroad as well as other factors.
“The nominal wage rose 1.66 percent between January and April, the highest in eight years,” Huang told a media briefing.
“But the gain failed to match the rise in commodity prices, rendering the real wage to register the biggest negative growth in history,” he said.
Huang said rising fuel, food and raw material prices are to blame for the inflationary pressures, but corporate mergers and the privatization of state-owned enterprises have prompted companies to keep personnel outlays down to stay competitive.
Before 2000, real wages often saw a 5 percent growth, which slowed down to 1.5 percent in recent years, the report showed.
Kevin Hsiao (蕭正義), director of UBS AG’s Taipei branch, said the negative real wage growth would stay in the short run, because fuel and raw material costs are likely to remain high in the third quarter, thereby reducing the prospect that companies would be able to raise their corporate profit margins.
“Against this backdrop, most employers will be unwilling to raise their personnel expenditure,” Hsiao said in a telephone interview.
The negative real wage growth is likely to ease off in the fourth quarter, however, as falling fuel demand will be reflected in the CPI and other indicators, he said.
Airlines worldwide have cut passenger flights to reduce their fuel costs, which will help contain inflation and narrow the gap between real wage and commodity price growth, Hsiao said.
Meanwhile, the DGBAS said unemployment in Taiwan stood at 3.84 percent — or 416,000 people — last month, up 0.03 percent or 4,000 people from April.
An increase in the number of first-time job seekers and people unsatisfied with their old jobs were responsible for the rise, Huang said.
Seasonally adjusted unemployment stood at 3.89 percent last month, down 0.03 percentage points from April, the DGBAS report said.
That represented a dip of 0.04 percent year-on-year, the lowest in eight years, the agency said.
Unemployment in the first five months of the year averaged 3.85 percent, up 0.01 percentage points from the same period last year, the report said.
Job seekers aged 15 to 24 topped other age groups with 10.36 of them unemployed, followed by people aged between 24 and 44, who comprise 3.83 percent of the jobless population, the DGBAS report said.
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