Statistics recently released by the government reflect the problem of low wages in Taiwan. Government statistics show that the average growth of monthly wages in Taiwan's manufacturing, industrial or service sectors have been lower than those in South Korea, Singapore and Hong Kong over the past decade.
Efforts by the previous administration to increase salaries have been in vain because Taiwan's economic growth has always been driven by exports rather than domestic demand. Higher wages mean an increase in costs, which could harm the competitiveness of export prices.
But does it mean that wages must be suppressed in countries with high trade dependence and an export-reliant economy? That is not the case. Singapore and Hong Kong both have much higher trade dependence than Taiwan, but they also have a higher wage level and growth rate than Taiwan.
The labor shortage problem has worsened in Taiwan recently, with the National Development Council saying that Taiwan's labor force could lose 180,000 workers each year in the future.
Theoretically speaking, a labor shortage should push wages higher. However, since the industrial sector is unwilling to increase wages, the government has had to introduce a significant number of foreign workers to fill the labor shortage, exacerbating the problem of low wages.
When the number of foreign laborers exceeds 600,000, but the industrial sector continues to urge the government to introduce more foreign laborers, we need to ask ourselves: Why do Taiwanese industries need so many workers? Why, after employing so many workers, is our economic performance still lagging behind that of our Asian competitors?
When the industrial sector complains that Taiwanese employees are unwilling to take on many jobs, it reflects two problems. First, the companies may not have proposed wages high enough to attract these employees. Second, Taiwan should not focus on an industrial structure and production model that relies on large numbers of laborers.
The logic of economy is not complicated. It is about making good use of limited resources to improve people's happiness. As a country with limited resources, Taiwan should develop an ideal economic mode and industrial structure accordingly, and make sure that the fruits of the economy are used to improve people's well-being.
American academic and author Michael Porter, when visiting Taiwan two years ago, pointed out that Taiwan's overall competitiveness ranked 18th among 144 countries, but its wage levels ranked only 60th, showing that its industrial competitiveness has not improved.
One of the reasons that brought the new government to power was because low wages make people feel deprived. Therefore, the success or failure of economic policies should not be solely judged by investment, export and economic growth indicators. Real wages and labor conditions should also be effectively improved.
The new administration's plan to develop the "five plus two" innovative industries is excellent, but the more urgent and unavoidable task is to transform and upgrade Taiwan's existing industries and companies.
Source: Focus Taiwan News Channel