As Taiwan's employment grows, structural unemployment remains a problem

This article was published by the Taiwan Headlines on March 31, 2006. It reports that Taiwan's long-term jobless population dropped to 58,000 in February 2006. It was the first tie in five years that the figure has gone below 60,000. The term "long-term jobless" refers to those who have been out of work for more than a year.

Figures provided by the Directorate General of Budget, Accounting and Statistics show that Taiwan's average annual long-term jobless figure hit a high of nearly 120,000 in 2002, accounting for one-fourth of total jobless population. In 2003, the number fell below 100,000 as the economy gradually recovered. By the second half of 2005, the number had declined to 70,000.

The average length of joblessness - 25.5 weeks - also hit a five-year low in February 2006. Most of the jobless were in the 30-49 age bracket, which accounted for 55 percent of the total. This indicates that middle-aged people have the hardest time finding jobs.

Meanwhile, the number of the hidden unemployed remained at a high 136,000 at the end of 2005. The term "hidden unemployed" refers to those who have withdrawn from the job market after remaining unemployed for more than a year.

Officials from the Council of Labor Affairs claim that government employment offices around Taiwan posted a total of more than a million job offerings at the end of 2005. Each job seeker had 1.74 job offerings on average, but the job-matching rate was only 45.4 percent. More than half of the jobs on offer were not taken.

According to the Council of Labor Affairs, Taiwan's total employed population broke through the 10-million mark in the second half of 2005, thanks to factors such as the recovering of manufacturing industries, rising exports, and the government's expanded infrastructure development. It is expected that the workforce will continue growing through the rest of 2006.

This article argues that Taiwan's current problem is the imbalance in the structure of the job market, not its total size. According to the Council of Labor Affairs, at the end of 2005, the number of job offerings for business and sales representatives was 7.51 times the number of job seekers in that category. The ratio was 4.7 in the case of security guards, 3.1 in that of product salespersons, 2.7 in that of electronic assembly lines, 2.0 in that of telecommunications engineers and restaurant waiters, and only 0.3 in that of clerks and office assistance.

A slow-moving job market often leads to a drop in savings. Among the usual five household income groups, the top 20 percent of households boosted their savings in 2005, while the other four groups - the bottom 80 percent - experienced a considerable reduction. For the bottom 20 percent, average savings in 2005 amounted to only NT$1,800 (US$52.94), down sharply from NT$27,000 (US$794.12) in 1999. Over the same period, saving by the middle 20 percent fell from NT$140,000 (US$4,118) to NT$90,000 (US$2,647). These declines all reflect Taiwan's increasing livelihood difficulties.