Analysis: Taiwan Needs Higher Wages, Businesses Diversification To Compete

TaiwanPlus News

The government's latest report on pay levels shows average wages are up in Taiwan more than 3% compared to last year. TaiwanPlus speaks to labor rights researcher Roy Ngerng to discuss the gender pay gap, Taiwan's international competitiveness and the long-term development remain issues related to local salaries.

Transcript

00:00Taiwan's Budget and Statistics Department released its latest monthly wage report

00:05shows there's still a gender pay gap in Taiwan's average wages. What's your take on this?

00:11I think, first and foremost, it shows that there is still some form of gender discrimination going on

00:17in spite of the achievements Taiwan have made in terms of gender equality in the broad society.

00:24And I think one major reason is that there is a lack of wage transparency, salary transparency,

00:31where it's not possible for people to have a good sense of what their counterparts at work are being paid.

00:37And it is therefore not possible for people to demand for higher and fairer wages.

00:43Taiwan's average wage is still relatively lower compared to other advanced economies like Japan, South Korea and Singapore.

00:51How do you see this wage differential affecting Taiwan's competitive position in the international market?

00:58I think when Taiwan looks at the competitiveness of the economy, it doesn't tend to look at it in terms of attracting talents,

01:06but in terms of how much it can sell its products and exports to other countries.

01:12And therefore, I think the idea among the government policymakers over the last two to three decades has been that

01:19they need to lower wages or suppress wages in order for Taiwan to be competitive.

01:25And I think there is a huge concern that the low wages are in part to play in terms of how Taiwan's value added growth is not able to catch up.

01:36And if you compare wage in terms of wages,

01:41advanced countries with higher wages actually do have higher value production.

01:46And it makes sense because research says that in countries where there are higher wages,

01:52workers are more motivated, they feel more committed, more engaged to their work.

01:56They are willing to think of ways to innovate, to help the company innovate and build higher value,

02:01higher innovation and higher priced products that can allow them to sell at higher profits.

02:07And I think the larger problem is that Taiwanese who have the capabilities,

02:13who are skilled, who are well-educated, they tend to go overseas if they're not able to receive

02:18the high salary that their quality of skills, their capabilities demand.

02:23And there are many Taiwanese who do possess such capabilities,

02:27because Taiwan actually ranks one of the highest in terms of OECD PISA scores.

02:32So we are losing a huge amount of Taiwanese talent who could stay in Taiwan,

02:36as well as foreigners, foreign talent who can come into Taiwan.

02:40While Taiwan has seen an increase in average wages by over 3% year,

02:46inflation has also eroded the real purchasing power of salaries.

02:50In your opinion, where do you see Taiwan's wages heading in the long term?

02:55And are we on a positive trajectory?

02:58So when we look at average wages increasing,

03:02while it is good that it is increasing faster, is it adequate?

03:06And that is a major question.

03:08We are sending out the signal that the knowledge economy,

03:13the kind of skills, higher skills that we want from workers is not valued.

03:17This is a wrong signal we are sending to workers,

03:21and even to the development of businesses.

03:23If we want Taiwan to be a more competitive economy,

03:26where we are able to move into the knowledge service economy,

03:29to move our manufacturing sector into a higher value manufacturing sector,

03:35that can compete with countries in Western Europe,

03:38with South Korea, with Japan on the same level.

03:41I think it is not adequate for the government to champion that they have seen higher increases

03:48compared to the last 20 years, last 30 years.

03:50They need to be able to find meaning and value in how the wage increases actually feed back into the inflation,

04:00into the cost of living pressures of individuals, as well as how it can transform Taiwan,

04:06beyond just looking at the low cost economy,

04:10but moving Taiwan into a more expansionary phase.

04:15I will look forward to helping Taiwan to hand out with weaving subscriptions.

04:19And what do you think about studying attachments now?

04:21Thealin Est would be the opportunity to join our weekend previartour team.

04:24This year, here we graphically,

04:25I would say to see the commission betweenedators for guitarists,

04:27to make the technique that was over for gas you,

04:30and by requesting assistance to others.

04:32I would suggest that this was high

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