On the first Labor Day of the 21st century, Taiwan's labor unions held separate parades under the flags of the Chinese Federation of Labor (全國總工會) and the Taiwan Confederation of Trade Unions (全國產業總工會), and raised demands for the safeguarding of labor unions and the solving of the unemployment problem.
In fact, unemployment is not just Taiwan's problem, but a global one. Several important issues have emerged in connection with the current trends towards economic liberalization, globalization, democratization, and knowledge-based economies.
One such important issue is the increasingly serious global unemployment rate. In the early 20th century, unemployment was related to business cycles. But after 1930, governments learned how to use monetary and fiscal policies to effectively control business cycles and prevent serious unemployment problems. Governments also set up unemployment insurance programs to address short-term, mild recession, in order to effectively ease the pain of short-term unemployment. But since the 1980s, under the trends toward trade liberalization and international division of labor, industrialized nations have faced structural unemployment problems that have had nothing to do with business cycles. A country may enjoy high economic growth rates, but its unemployment rate will not fall as a result. The government's monetary and fiscal policies cannot effectively lower such unemployment. In some countries, the unemployment rate remains in double figures for long periods. Recently, this wave of unemployment has spread to the newly industrialized nations of Asia, which have long taken pride in their low unemployment rates. Joblessness is on the rise in Taiwan, South Korea, Japan, Hong Kong and Singapore. It is especially serious in Taiwan.
The second issue is the polarized, uneven, winner-takes-all distribution of income. In the current "borderless" business environment, labor unions and state labor laws have ceased to function effectively. In an era that emphasizes human resources management and the knowledge-based economy, collective bargaining and collective action have been replaced by individual ability and performance as the decisive factors in improving an individual's life and working conditions. Unprotected by labor unions and labor laws, the wage gaps between different jobs, professions, countries and regions widen rapidly.
The third issue is protection of the livelihood of retirees. In the 20th century, labor unions and labor laws made businesses provide complete sets of guarantees for retiring employees. Most of these retirement systems adopted fixed annual pensions, which were not affected by fluctuations in the economy or the stock market. But after economic liberalization and internationalization, businesses began to hire more and more temporary and atypical workers -- who do not enjoy pension protection -- in order to raise their competitiveness. To lower costs, businesses also began to adopt "defined contribution, non-defined payment" pension systems for their permanent employees. Governments also began to revise their labor laws and privatize their state-run pension programs in order to ease the burden on their coffers.
As we have seen recently, however, pension fund accounts run by laborers have been affected -- or even sunk -- by major fluctuations in the stock markets. In Taiwan, serious public concern has been raised over the government's use of labor pension funds to shore up the stock market. How should we revise the pension system in order to protect the livelihoods of employees in their old age? How much risk should employees take in managing their pension funds?
The fourth issue is the bankruptcy of health insurance. With the development of drugs, the numbers of medical treatments multiply and people live increasingly longer lives. Consequently, health insurance also becomes more and more expensive. But the emergence of new materials and new genetically-modified foods gives rise to new diseases. In order to keep their costs down, businesses try their best to evade their responsibility for their employees' health insurance. At the same time, governments are becoming less able to shoulder health insurance costs. Taiwan's national health insurance program stands to go bankrupt in less than a year, because of the serious debts owed to the fund by local governments. Since business is unwilling and the government unable to shoulder the cost, who is going to pay for the people's health insurance?
The fifth issue is the global migration of labor. The trends of globalization, internationalization and liberalization make it cheap and convenient for people to move from country to country. As a result, large numbers of people move from poor regions to high-income countries, either on a long-term or a short-term basis. They seek high-paying jobs and enjoy generous welfare benefits. High-income countries want to stem this tide of international migrants, but their efforts have only had limited effect because restrictions on immigration only result in illegal immigration and illegal foreign workers. Restrictions cannot effectively stop their entry. In fact, illegal immigrants and illegal foreign workers can cause greater social costs than legal immigrants and workers. Taiwan does not allow the import of Chinese workers, but there are quite a few illegal Chinese workers in restaurants and in rural areas.
In the early 20th century, governments did not handle labor problems with the seriousness they deserved. The result was the spread of fascism and communism, which brought unprecedented catastrophe for humanity. Today's global economic and social structures are also undergoing unprecedented change. The Internet and knowledge-based economies have completely changed our ways of thinking, lifestyles, employment patterns and social values. Governments, labor unions and social groups from around the world should seriously discuss these issues and join hands to resolve them, so that they will not fester and give rise to new forms of extremism -- and another catastrophe for humanity.
Joseph S. Lee is president of the Institute of Knowledge-based Economy and Management.
Translated by Francis Huang
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