The Directorate General of Budget, Accounting and Statistics (DGBAS) has announced that the unemployment rate for last month stood at 4.92 percent, representing a fall of 0.13 percentage points from the previous month. It is the first time in 23 months that the figure has dropped below 5 percent. Of course this is good news, and the Cabinet can, for the time being at least, allow itself a sigh of relief. However, given that the international and domestic economic situation is in a state of rapid flux, neither the government nor private firms can let their guard down just yet.
Premier Wu Den-yih (吳敦義) has said on several occasions that he would stand down if he couldn’t get the unemployment rate below 5 percent before the year was out. The news comes just in time to save his skin. However, the government has recently embarked on a number of short-term initiatives to get people back to work, albeit for close to minimum wage. When these programs are finished, and the temps are back looking for work, the rate could well go right back up to where it was before.
According to figures for this year’s Council for Economic Planning and Development (CEPD) employment implementation plan, about 103,000 job placements became available in the first half of the year, including subsidized positions in the private sector and short-term public service positions, with a total of 114,000 more for the second half of the year. CEPD sources say that there is no way of knowing how many people will keep their positions after their temporary contracts are up, although it is known that of the latter 114,000 positions, only about 66,000 have been filled to date. Taiwan Labor Front secretary-general Son Yu-lian (孫友聯) suspects that there are currently about 1 million temps out there, and these are likely to show up in unemployment figures once the plan comes to an end.
In the second half of this year, the export situation is looking a little rosier, with exports shooting up and private investment increasing. There has been a return to form for semiconductor and panel orders, too, and the service industry is also showing healthy growth. Companies in Taiwan are no longer laying people off or sending workers on unpaid leave, and are actually taking on new staff, which is improving unemployment figures.
Caution is still advised, however. The global economy is unstable at the moment. Governments throughout Europe continue with austerity measures in an attempt to balance their battered books, while the US has been pressuring Asian countries to allow their currencies to appreciate against the greenback. Although a weakened dollar is good news for US exporters and for reducing the US’ huge foreign debt, it also makes imported fuel and raw materials more expensive — not necessarily good for domestic consumption or employment. Global inflationary pressure is on the rise, and in China, too, measures to curb inflation have become a priority.
The US and China are Taiwan’s major export markets, so Taiwan is particularly vulnerable to changes in those two economies, and this is especially true now that Taiwan has signed the Economic Cooperation Framework Agreement (ECFA) with China. There is little reason to be optimistic. Our small and medium-sized enterprises and labor force stand to be hit hardest.
Yes, the unemployment rate has fallen below 5 percent, but, please, put away the party poppers for now. The government cannot rest on its laurels and should redouble its efforts to encourage domestic investment and production competitiveness to try to create more jobs for the workforce. It’s worth bearing in mind that US President Barack Obama’s recent drubbing in the US midterm elections was a result of his failure to resolve high unemployment.
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