The government’s latest unemployment figures make sobering reading, as the jobless rate reached 5.31 percent last month, with the number of people out of work climbing to 578,000, the Directorate-General of Budget, Accounting and Statistics reported on Thursday. Including the 274,000 people who worked less than 16 hours a week and were included in the category of “hidden unemployment” in the government’s report, the broad unemployment rate reached 6.85 percent last month.
Job prospects look no better in the months ahead given the poor outlook for Taiwan’s exports and domestic consumption. Therefore, economists predict the jobless rate could reach 7 percent to 8 percent in the fall, with new college graduates joining the workforce in the summer.
If this scenario comes about, then the prediction by a senior economist for the Economist Intelligence Unit a week ago that Taiwan’s unemployment rate would surge to 10 percent by the end of the year will not be as far-fetched as it sounds.
Experts have warned that this economic recession will be more serious than the one in 2000-2001. In response, the government has launched job-creation programs in an attempt to keep the unemployment rate under 4.5 percent by the end of the year.
The government is right: Unemployment could increase without the implementation of job-creation programs. The question is, what do we care about: the unemployment rate or the unemployed?
While these job-creation programs may help stem a sharp rise in the unemployment rate in the short term, they do not and will not change the structure of the nation’s job market in the long run.
Take those who were unemployed for more than one year — who national statistics officials refer to as the “long-term unemployed” in their surveys.
Last month, this group surged by 87,000, to 260,000 people — 42 percent higher than a year earlier. If government programs were proving effective, the number of long-term unemployed should drop. It hasn’t.
People in this category often face financial and health care difficulties after an extended period of unemployment. They gain no benefits from the government’s job-creation programs as statistics show.
After being out of the labor market for an extended period of time, people in this group are bound to face more difficulties getting back to work than other type of jobseekers once the economy recovers.
The government should also be aware of the risks of college graduates, people aged 45 and older and those working in the information and manufacturing sectors joining the ranks of the long-term unemployed at a faster-than-expected rate as the recession persists.
The implications of this extend far beyond economic considerations, because college graduates are the new blood of the job market, people aged 45 and older form the backbone of household finances and high-tech employees account for a major part of Taiwan’s export-oriented economy.
To address the problem of long-term unemployment, the government must boost small and medium-sized enterprises, which are major job providers. It also needs to prioritize long-term economic development, or the ranks of the long-term jobless will continue to swell in an economy heavily reliant on high-tech exports.
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