Workers feel like they're earning less

This article was published by the Taiwan News on March 8, 2006. It reports that many workers in Taiwan feel that in recent years it has become harder to earn a living due to shrinking salaries and the difficulty of finding a job. This is despite the fact that Taiwan's jobless rate has showed a downward trend in these years.

Official statistics show that in 2005, the average monthly salary of an employed person in Taiwan stood at NT$43,615 (US$1,283), up 1.38 percent from the previous year. However, if the annual rise of 2.3 percent in the consumer price index is deducted, then the substantive regular monthly salary fell by 0.9 percent in that year.

Taiwan experienced the first drop in substantive regular monthly salary in 2002, with a fall of 0.69 percent. The shrinkage in salaries has happened not only in Taiwan, but also in nations such as the United States and Japan. The United States saw a decline of 0.62 percent in 2004 and 0.74 percent in 2005 in its substantive regular monthly pay. Japan witnessed the corresponding percentage drop by 1.57 percent in 2002 and 3.26 percent in 2004.

In Taiwan, the shrinkage in salaries is the result of growing competition in the economy both at home and abroad. Such competition has forced manufacturers to search for ways to lower their production costs, and many managers have chosen to lower the wages of their employees. Consequently, an increasing number of employers do not hesitate to freeze or slash salaries of their existing employees and to further reduce the beginning salary for new workers.

In 2005, Taiwan's more than six million employees witnessed a reduction in their real substantive monthly salary by an average of 1.28 percent, to NT$34,490 (US$1,014) per capita. Also in that year, each jobholder worked about 182 hours per month on average, down by 1.5 hours from the previous year.

Ironically, with the rapid growth of temporary jobs, Taiwan's average jobless rate fell to 4.13 percent in 2005, down 0.31 percent from the previous year. The jobless rate even fell to as low as 3.8 percent in January 2005.

Market analysts point out that today, more and more employers in Taiwan prefer to hire part-time or temporary workers instead of full-time employees, in order to avoid offering bonuses, welfare benefits, retirement pensions, and many other types of extra pay. Meanwhile, many employers have complained that the lack of commitment and the rapid job changing exhibited by today's younger workers have discouraged employers from hiring long-term employees.

In 2005, Taiwan's temporary labor force increased by at least 20 percent. As the government's new retirement system is expected to boost personnel costs by about 6 percent, it is expected that more companies will resort to hiring temporary workers.

As more and more Taiwanese companies expand or relocate their production bases to China, Southeast Asia, India, Russia and even Africa, where cheap industrial land and labor is on offer, Taiwan's workers know that they are very unlikely to receive pay raises from their employers. In the mean time, with fewer and fewer changes of being employed, many job seekers have been forced to start their own businesses, and the number of street peddlers, stall keepers and small workshops is growing. In 2004, there were only 20,000 small workshops registered in Taiwan, but the number soared to more than 60,000 in 2005.