Mon, Aug 15, 2011 page12

• FEATURE: The rapidly changing face of local unemployment

  GOLDEN GOOSE: One expert said that SMEs account for about 90% of companies in the nation and deserve more government resources because they create more jobs

  • By Amy Su / Staff Reporter
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  Imagine a seemingly paradoxical situation where local corporations complain that they are unable to find enough workers to fill their vacancies, but thousands of people remain unemployed.

  This has been the situation faced by Taiwanese companies and jobseekers over the past few months.

  The latest data from the -Directorate-General of Budget, Accounting and Statistics (DGBAS), showed that the vacancy rate for employees in local companies — including both service and industrial sectors — rose to 3.36 percent in February, the highest level since 1999.

  The vacancy rate in the manufacturing sector topped that of the industrial sector, with a rate of 4.05 percent, while electronic components firms recorded the overall highest vacancy rate at 4.79 percent, DGBAS said in the report.

  In the service sector, the wholesale and retail industry faced the most acute labor shortage, with a vacancy rate of 2.62 percent, DGBAS said.

  Nationwide, the unemployment rate has not yet fallen to the level it was at before the financial crisis of 2008, with a relatively high jobless rate of 4.35 percent in June, according to DGBAS data.

  That means a total of 486,000 people are still out of work.

  Chen Min (陳憫), a deputy director at the DGBAS’ statistics bureau, expects labor shortages and unemployment to gradually improve in the near future as the vacancies are filled.

  However, many economists see the coexistence of such a contradictory phenomena as a sign of deeper structural problems that will be far more difficult to resolve.

  This imbalance in the job market results from the fact that many positions being offered fail to meet jobseekers’ minimum requirements, whereas other firms cannot find qualified enough jobseekers to accept the positions they are offering.

  Hsin Ping-lung (辛炳隆), an associate professor at National Taiwan University’s Graduate Institute of National Development, says that jobseekers tend to be more picky about pays and working conditions when the economy bounces back — like now.

  “This means that in the short-term, low-end, low-paid or night-shift positions — such as waiters, waitresses and production-line workers — are less attractive to jobseekers,” Hsin said.

  Another problem is that the increased number of college graduates entering the labor market has transformed the nature of the jobseekers market, as many are only willing to take office jobs, as opposed to laboring jobs, Hsin added.

  The latest labor shortage data from the DGBAS backs up Hsin’s statement, indicating that skilled workers, factory workers and assembly line workers account for 28.4 percent of the nation’s vacant positions.

  However, Joseph Lee (李誠), a labor economist and vice principal at National Central University, says that the recent labor shortage could be directly linked to the structural problem of unreasonably low wages.

  “Firms that complain about a shortage of labor are like people who want to get a luxury BMW car for the same price as a Honda Civic,” Lee said.

  In contrast, companies offering high-end positions with decent pay and working conditions often find that none of the applicants interviewed are qualified for the job.

  “We hope to recruit 800 new employees — mostly in the marketing and design engineering sectors — this year, but we soon realized that it was going to be difficult to find so many qualified candidates, as many were not familiar with related hardware,” a notebook contract maker’s human resource manager, surnamed Yang (楊), told the Taipei Times.

  Formosa Plastics Group (台塑集團, FPG) recently discussed the possibility of hiring Singaporean technicians to manage the group’s accident-prone pipelines at its Mailiao (麥寮) petrochemical complex in Yunlin County, because it is concerned that local jobseekers just do not have the necessary skills.

  Chen Hsin-hsing (陳信行), an associate professor at Shih Hsin University’s Graduate Institute for Social Transformation Studies, suggested that the experiences of these enterprises did not reflect the real labor market situation.

  “The labor shortage could be a bogus issue raised by these specific companies as a way of persuading the government to lift the ban on hiring more overseas workers in Taiwan, because otherwise they have to pay local workers higher salaries,” Chen said.

  Economists believe that a possible middle way out of the current impasse could be for companies to raise pay, while jobseekers seeks to enhance their employability

  More pragmatically, the government should help raise jobseekers’ capabilities by building an education system that focuses more on vocational training, while offering more training courses for the unemployed, said Cheng Chih-yu (成之約), a professor at National Chengchi University’s Graduate Institute of Labor Research.

  In addition, the government should help local corporations create high-end and well-paid jobs by encouraging them to develop new high-value businesses, Cheng said. Increasing subsidies for corporate research and development would be one possible approach, he added.

  Kenneth Lin (林向愷), a professor of economics at National Taiwan University, said local small and medium-sized enterprises deserve more government resources as they create more job opportunities than larger firms. About 90 percent of the companies in Taiwan are classified as small and medium-sized enterprises.

  In the short-run the government can only improve labor supply and rein in unemployment through makeshift measures to ensure economic recovery, but there is no quick fix to what is a deep-seated problem in the structure of the job market nationwide, Lin and Cheng said.

  “There are always going to be jobseekers who are picky aboutpays and working conditions, but insufficiently qualified to apply for ‘high-end’ positions and that could feasibly create a structural problem in the form of labor shortages and unemployment,” Cheng said. “There really is not much the government can do to resolve this problem.”

  Even if jobseekers do accept low-end jobs, Lin said that the fact many local corporations maintain overseas manufacturing sites, means that they could still cut back on local hiring.

  Lin blamed the government’s liberal industrial policy for the job market imbalance as a growing number of local companies move their factories to other countries, such as China. The government should have imposed restrictions on factory relocation, he says, particularly given the adverse impact of a “too open” policy on the job market.

  However, the government continues to believe that the opening-up policy remains a panacea for all nations economic ills, Lin said.

  “That is going to make the target of getting the unemployment rate below 4 percent even harder to achieve,” Lin said.
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