More than 50 percent of Taiwanese in their 30s are either underemployed or heavily in debt, a survey released by 1111 Job Bank on July 12 showed.
The poll found that the average monthly starting salary for people in their thirties was NT$25,930, but 41.76 percent of their salaries was used to pay off debt, and a higher percentage in high-cost areas such as Taipei. Average salaries in Taipei are lower than those in many major Asian cities, even though Taipei’s cost of living is not much lower.
In Tokyo, the average monthly rent for a modest one-bedroom apartment within a short distance of downtown is ￥112,307.69 (NT$30,918), compared with NT$18,982.46 in downtown Taipei. Monthly utilities in Tokyo for an 85m2 apartment are ￥21,646.22 (NT$5,959), compared with NT$2,639.16 in Taipei. However, while rent in Tokyo is 1.7 times as high as in Taipei and utility costs are 2.27 times higher, the average starting (post-tax) salary in Tokyo is ￥332,402.33 (NT$91,509), 3.5 times as high as in Taipei.
Not all costs in Tokyo are higher than those in Taipei. Kindergarten tuition, which is subsidized by the Japanese government, is 35 percent lower in Tokyo than in Taipei. All of this equates to a better quality of life for Tokyo residents — and the city is not unique in this regard.
Young people with the opportunity to leave Taiwan often do so, with many going to work in China. The government must help raise salaries before the problem seriously effects development and national security. China is taking advantage of the situation by offering incentives to attract Taiwanese young people, which is affecting attitudes toward China and risks the erosion of Taiwan’s democracy.
Aware that they might never be able to buy a home, many Taiwanese appease themselves by spending heavily on products with depreciating values, such as cars, luxury items or expensive vacations. Those without money pay for such consumption with credit so that they can keep up with the Joneses.
Research has shown that social media use affects consumer spending habits and Taiwanese are among the heaviest social media users in the world.
A report published by the American Chamber of Commerce on April 12 last year cited data from Statista showing that Facebook’s penetration rate in Taiwan is 82 percent — the highest in the world for the platform — and cited a survey released by the government-backed Market Intelligence and Consulting Institute in October 2016 showing that nearly 95 percent of people in Taiwan had some experience using Facebook.
By contrast, a report from the Pew Research Center published on March 1 this year said that only about 68 percent of adults in the US had Facebook accounts.
The heavy use of Facebook and other social media in Taiwan equates to innumerable online interactions leading directly to purchases. A big reason for this is the tendency of users to compare themselves with others when they are online.
A study by Allianz Life Insurance Co of North America published on March 15 by CNBC said that 60 percent of “millennial” respondents felt “inadequate” after comparing themselves on social media.
Another study by Keith Wilcox of Columbia University and Andrew Stephen of the University of Pittsburgh found that those who spent more time on social media were more likely to have lower credit scores and more credit card debt.
Taiwanese shoppers tend to make the majority of online purchases through Chinese platforms such as Taobao, which does not help Taiwan’s economy.
The government should do more to discourage people from purchasing habits that lead to the accumulation of excessive debt, while working harder to raise salaries across all industries.
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