Tue, May 15, 2001 page8

• Plan for dynamic labor changes

  • By Hong Chi-chang 洪奇昌
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  Due to the rapidly changing structure of industry, unemployment has been on the rise in recent years. Before 1996, unemployment had never risen above 2 percent. According to the Directorate General of Budget, Accounting and Statistics (DGBAS), the unemployment rate for March was 3.89 percent -- around 380,000 people. After seasonal adjustments, the rate for March stood at 4.06 percent, compared to 2.93 percent in the same period last year. The government has been making efforts to ease the problem, but we need to discuss the political and economic significance of joblessness as well as look for solutions.

  First, government industrial policy has been unclear, deepening the imbalance in regional development. According to DGBAS data, the three areas with the lowest jobless rates are: Hsinchu County, Taoyuan County and Hsinchu City -- bastions of high-tech industry. Seven areas have had unemployment rates exceeding 4 percent for three months in a row: Keelung City, Tainan City, Hualien County, Nantou County, Kaohsiung City, Kaohsiung County and Ilan County. With the exception of Nantou -- which was seriously damaged by the 921 earthquake -- the list shows that the traditional industries are having a hard time with the economic slowdown.

  The Council of Labor Affairs (CLA) meant well by recently inviting the heads of those seven cities and counties to a meeting and asking them to come up with concrete proposals to resolve the unemployment problem. The CLA has even offered to assist local governments in raising funds to enact such proplosals. But this is just a way of treating symptoms, not the disease.

  Taiwan long ago merged into the global manufacturing chain. Can a development model which habitually relies on export processing and OEM (original equipment manufacturing)/ODM (original design manufacturing) to support an economic miracle lead to a thorough transformation into a knowledge-based economy?

  If the answer is "yes," how do the cities and counties divide the labor? What are their roles and functions in the different regional economies? If the answer is "no," then shouldn't we give up political wrangling when it comes to the division of administrative dis-tricts, or the issue of upgrading the administrative status of cities and counties? Shouldn't we carefully think over the fundamental benefits for cities and counties of developing on their own?

  Secondly, we should abandon the view of labor as a commodity. To run an economy, however, labor needs to maintain its vitality and rejuvenate itself. Laborers need to be able to survive. A younger workforce should take over the jobs vacated by people resigning from their jobs. But these regenerative factors are often ignored in a capitalist economy.

  During an economic slowdown wages often shrink. In January and February of this year, the average wage rose by a mere 1.68 percent compared to the same period last year. It was the first time in 20 years that the figure had grown by less than 2 percent. This attests to the attitude that when the employment situation is bad, workers best not quibble over salary raises.

  Exactly what level of salary will a worker need in order to feed him or herself and family? What capacity for consumption will the salary allow? When forced out of the labor market, what kind of social welfare systems will be needed in order to be spared the fear of economic insecurity? These are issues that the government should work on, given the absence of a social safety net.

  Third, how do we narrow the increasingly polarized technical skill levels of laborers? Industrial and employment structures are changing along with the economic transformation. Business managers and the technological elite will inevitably take the lead in the economy. Demand for workers will inevitably fall in manufacturing and an increasing number of jobs will be lost as factories close. How should the state utilize the manpower released by the labor market?

  Apart from improving vocational training courses and providing employment services, one important task will be to elevate the role of the rapidly developing service sectors -- such as health insurance, real estate and education. In mature, high-income countries, the demand for these sectors will continue to grow in the coming century. As Taiwan gradually becomes a developed welfare state, it will need more manpower for related fields. Job opportunities created by these sectors could unshackle the unemployed.

  In the face of increasingly unemployment, how will the government respond in policy-making, in dividing responsibilities, in establishing a social security network and strengthening vocational training? These questions will test the government's respect for the people's "right to work."

  Hong Chi-chang is a DPP legislator.

  Translated by Francis Huang
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