A few days ago in a meeting with Anti-Poverty Alliance members, President Ma Ying-jeou (馬英九) said that over the past three years, thanks to the efforts made by various sectors, 380,000 new job opportunities had been made available and the unemployment rate had fallen to 4.27 percent as of May. Ma admitted that more than 400,000 people are still out of work. He also said the fact that many traditional and high-technology manufacturers are complaining about worker shortages means that there is still much room for improvement in matching job seekers with vacancies.
Is the unemployment problem Taiwan now faces really, as Ma said, just a matter of matching people up to jobs? Actually, the real problem is somewhat different, and involves realities Ma is not willing to admit.
The unemployment rate has declined a little recently, but the main reason for this is not that there are more jobs, but that many long-term unemployed people have given up looking for jobs and are not included in the official jobless figures. Another factor is that the government has launched various short-term employment programs, which have had a cosmetic effect on the joblessness statistics.
Experience tells us that a real increase in the number of jobs is always signaled by better salary offers to attract new recruits. In Taiwan, however, the real incomes of working people have not gone up. Instead, they have fallen back to where they were a decade or more ago. This shows that the job market in Taiwan is fundamentally different from the way Ma describes it. The clearest illustration of this is the high overall unemployment rate for college graduates, and that their average starting salary, when they do find jobs, is about NT$25,000 a month.
On July 4, Bloomberg carried a report headlined “Taiwan jobs sucked to China by failure to mimic Singapore economic model” (“Taiwan continues to flounder as China sucks up all the jobs,” July 7, page 9). The report said that while many Taiwanese factories had moved offshore, Taiwan had not responded by developing new growth industries, as Singapore had done. It said Taiwan’s 4.4 percent unemployment rate, while less than half that of the US, compared unfavorably to competitor economies in the Asia-Pacific region, being more than twice as high as Singapore’s (1.9 percent) and exceeding that of Hong Kong (3.5 percent) and South Korea (3.2 percent).
With regard to job opportunities moving abroad, the Bloomberg article cited data compiled by the Investment Commission showing that a single Taiwanese company, Hon Hai Precision Industry Co’s subsidiary Foxconn, employs more than 1 million people in China, while the total number of all manufacturing jobs in Taiwan as of May was 2.9 million.
The Bloomberg article came pretty close to identifying what people can see for themselves about the difficulties faced by Taiwan’s working class, but Minister of Economic Affairs Shih Yen-shiang (施顏祥), having read the article, not only failed to reflect on the government’s performance, but actually complained that the report was biased and looked at the development of Taiwan’s manufacturing industry from a negative angle.
Such a reaction is to be expected from the Ma government, because all its members, from Ma down, see Taiwan’s reliance on China as a magic formula for job creation. Notably, since signing the cross-strait Economic Cooperation Framework Agreement (ECFA) last year, they have all been boasting that Taiwan’s job market has improved a great deal. The Ministry of Economic Affairs even declared that there were 230,000 vacancies in the manufacturing and service sectors at the end of February, concluding that the job outlook must be pretty good.
According to the picture painted by the Ma administration, working people in Taiwan are already putting their problems behind them, but is that really true?
If so, why are the structurally unemployed still out of work? Why do university students still face the nightmare of going from graduation straight into unemployment? Why, after the government awarded a 3 percent pay rise to civil servants, and Ma and Premier Wu Den-yih (吳敦義) urged businesses to follow suit, have most companies held back? Why is it that however hard young people work, they still don’t dare to have children and can’t afford to buy a home? Why does the Ma government still pin its hopes on Chinese tourists coming to spend their money in Taiwan?
All these questions show that Ma sees the economy not from the viewpoint of the ordinary person, but that of a corporation. In a nutshell, the Ma administration’s policy of economic reliance on China is one that puts big business first and does nothing for the public at large.
Ma’s line of thinking is similar to that of Chinese officials, which is that when Taiwanese manufacturers invest in China, it is Beijing that is making sacrifices for Taiwan’s benefit. The reality, however, is just the opposite. In the two years since Ma’s government opened the doors to Chinese investment, Taiwan has approved more than US$25.1 billion of Taiwanese investment in China, while Chinese investment in Taiwan has been about US$150 million. In the light of this obvious disparity, it has to be asked whether Taiwan is creating more jobs for China, or is Beijing bringing more jobs to Taiwan?
The Ma administration also keeps making it easier for Chinese spouses and relatives to come to Taiwan, and it is trying to attract Chinese students to study here. In effect, the government is making it easy for Chinese to come to Taiwan and take our jobs.
Apart from China sucking up jobs, as the Bloomberg article said, the effect of factor-price equalization is that, as Taiwan’s economy gets locked into that of China, salary levels will tend to get closer and closer. Salaries in Taiwan will get pulled down by the lower pay levels in China until they are more or less equal.
If the Ma government does not change its China-friendly policies, then, even as it keeps promising a brighter job market outlook, the real income of Taiwanese will go into freefall, and the gap between rich and poor will continue to grow. The prosperity and stability long enjoyed by everyone in Taiwan will disappear like a puff of smoke, blown away by Ma’s hot air, and the benefits Ma touts for this year, which marks the centennial of the Republic of China, will turn out instead to be a disaster for the nation.
TRANSLATED BY JULIAN CLEGG
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