The sustained wage decline is shrinking individual purchasing power and retarding the government’s efforts to boost private consumption amid the economic downturn, analysts said yesterday.
The latest statistics showed the nominal regular wage, which excludes annual dividends and bonuses, averaged NT$35,130 (US$1,039) in January, down 0.79 percent from a month earlier.
The figure has contracted for four months in a row and has hovered around the same level for the past decade despite inflation, the survey by the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed on Monday.
Headline wage amounted to an average of NT$33,068 in 1999 and had risen to NT$36,423 last year, DGBAS tallies showed.
The trend has prompted people to cut expenses despite government attempts to encourage spending in the hopes of tempering the blow from slumping external demand.
Retail sales dropped 4.65 percent year-on-year in January and last month combined, leading the Ministry of Economic Affairs to voice concern on Monday that the issuance of shopping vouchers in January may have failed to boost consumer spending and were mainly used for regular expenses.
The government began the distribution of NT$3,600 in consumer vouchers to citizens and their foreign spouses on Jan. 18 in an attempt to increase private consumption, especially in the first quarter, when the recession is expected to hit the hardest.
Liang Kuo-yuan (梁國源), president of Polaris Research Institute (寶華綜合經濟研究院), said the wage cuts were unfavorable to economic growth and that industrial exodus was partly to blame.
“It is commonplace for companies to receive orders here but manufacture their products in China,” Liang said by telephone. “The practice helped keep wages down because labor costs are much lower there.”
Liang said the pace of migration decelerated last year after a series of tax cuts and deregulation on cross-strait trade, but the global financial crisis sent exports plunging on an unprecedented scale and drove up unemployment.
The outlook of wage improvement is grim in light of the expected drab business climate this year, Liang said.
Tony Phoo (符銘財), head economist at Standard Chartered Bank, said wages have much to do with competitiveness and Taiwanese makers, mostly contracted to manufacture electronic components, do not have the upper hand in negotiating prices.
“Some jobs are well paid while others are not,” Phoo said by telephone. “That is why innovation is such a valuable quality in the job market.”
He said that the country’s online game and IC design industries enjoyed impressive competitive edges, but that they were not big enough to offer mass employment.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary