A research paper released on Tuesday by the UN Conference on Trade and Development identified Taiwan as the biggest beneficiary of the US-China trade dispute.
The day before, the Singaporean-based DBS Bank revised its GDP growth forecast for Taiwan this year from 1.9 percent to 2.3 percent, while data from the Directorate-General of Budget, Accounting and Statistics showed that the nation’s economy grew 2.91 percent annually in the third quarter, its strongest posting in five quarters.
In a normal labor market, this would be cause for celebration. These impressive figures stand in contrast to the gloomy outlook for the world economy. The leaders of many countries, especially in Europe, would give up a limb for 2 percent annual growth.
With the nation’s economy humming along, Taiwanese employees might reasonably expect to see the proceeds of this growth passed along through higher salaries or bonuses.
Unfortunately, many in the business community cling to an outdated, short-sighted model, which involves continually screwing down costs — including salaries — while quietly pocketing any increase in profits. Investing in the workforce to ensure skill and talent retention appears to be anathema to the majority of Taiwanese business owners.
President Tsai Ing-wen’s (蔡英文) administration has identified low salaries as a significant problem, which it has tried to tackle through measures such as raising salaries for public employees, as well as increasing the minimum wage to NT$23,800 per month for salaried employees and NT$158 per hour for hourly workers.
In June, the government passed legislation that required listed companies to disclose the average wage of their nonmanagerial employees. It hoped that forcing companies to publicly reveal the salaries of employees would pressure listed companies to improve employees remuneration and corporate governance.
However, the problem with this plan is that the most Taiwanese companies are small and medium-sized enterprises that are unlisted. Smaller firms are normally family run, with owners appointing family members to management positions and treating lower-level employees like wage slaves through a culture of unpaid overtime.
This has led to a severely demotivated workforce and many Taiwanese are voting with their feet, leaving in droves to pursue careers overseas.
Unless there is a change in thinking within the business community, there is little that the government can do to ensure that the proceeds of economic growth are passed along to workers. Although this problem is not new — average wages have stagnated since the late 1990s — finding a way to stem the brain drain has never been more vital.
On Monday, Beijing announced its latest initiative to poach Taiwanese talent, unveiling 26 measures that build on the 31 incentives introduced in February last year. The measures further open China’s markets to Taiwanese firms and individuals, and extend many employment rights of Chinese to Taiwanese.
It is a brazen attempt to homogenize the two nations’ economies, stealthily introduce “one country, two systems” to Taiwan and interfere with the Jan. 11 elections.
Despite this week’s positive economic data, the government faces an uphill struggle to combat Taiwan’s Scrooge-like bosses and the siren song of China’s economy.
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