Since President Ma Ying-jeou (馬英九) took office, his administration has set the economy right at the top of its agenda. Against all odds, the GDP has risen, and is expected to grow by 8 percent this year. However, little of this is trickling down to the general public and the poverty gap has widened. According to the latest Cabinet figures, there is a 66-fold wealth disparity in Taiwan this year, an all-time high.
In 2008, those in the top 5 percent of the income pyramid enjoyed, on average, an annual income of NT$4.5 million (US$140,530). The bottom 5 percent only earned an average of NT$68,000. In 1998, the highest incomes were only 32 times more than the lowest.
Unemployment shot up as a result of the financial crisis and the salaries of those who managed to keep their jobs fell. Middle and low-income earners were hit badly, but the fat cats were left sitting pretty. Now that the economy is improving at an encouraging 8 percent rate, we are still not seeing a concomitant increase in salaries. To exacerbate the situation, commodity prices have been rising, pushing up the price of goods on the shelf. Middle and low-income workers are, therefore, being hit with a double whammy.
The culprit is evidently the triangular trade model in which orders are received in Taiwan and the goods manufactured in China. The percentage of trade carried out in this way has risen from 13 percent in 2000 to 50 percent in June this year. As a result, exporters and their shareholders, not the general public, are seeing the fruits of this economic growth. The poor struggle to make ends meet and the rich continue to get richer on the back of the labors of the poor.
This problem has been worsened by a big cut in inheritance, business and income taxes. Instead of investing the resulting surplus in productive industries, the rich have been speculating in real estate, pushing property prices higher. The cost of a home in Taipei City now equates to more than 11 years of salary for the average employee. People who don’t already own a home have no hope of ever owning one, and this hopelessness is fueling popular resentment.
A widening income gap has many undesirable results. It is generally accompanied by increasing disparity between regions, especially between urban and rural areas. These two factors chase one another, forming a vicious cycle. Second, upward mobility is slowed down or choked off completely. People with lower incomes despair of ever improving their lot. Such people feel trapped and exploited, leading eventually to grave social crises. The recent wave of resentment toward big business is a sign of this growing discontent.
One of the roles of government is to uphold social justice by distributing the fruits of economic development. The Ma administration stresses economic growth, but only the rich are gaining from it. Meanwhile, the middle and working classes are feeling increasingly exploited. Now that Taiwan and China have signed the Economic Cooperation Framework Agreement (ECFA), working people in Taiwan face even more direct competition from Chinese commodities and labor.
The government’s economic policies have just added fuel to the fire. The more the government pushes for economic growth, the more working people feel they are losing out relative to the wealthy minority. The income gap is creating an M-shaped society in which the middle class is eroding. The result is a loss of social cohesion and a breakdown of consensus that supports the existing social order. As the state loses its moral authority, we are likely to see growing discontent and social unrest. The ever-widening income gap will be an important issue in the November special municipality elections. If the Chinese Nationalist Party (KMT) government fails to deal with this issue, it could face a major upset at the polls.
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
Former minister of culture Lung Ying-tai (龍應台) has long wielded influence through the power of words. Her articles once served as a moral compass for a society in transition. However, as her April 1 guest article in the New York Times, “The Clock Is Ticking for Taiwan,” makes all too clear, even celebrated prose can mislead when romanticism clouds political judgement. Lung crafts a narrative that is less an analysis of Taiwan’s geopolitical reality than an exercise in wistful nostalgia. As political scientists and international relations academics, we believe it is crucial to correct the misconceptions embedded in her article,
Sung Chien-liang (宋建樑), the leader of the Chinese Nationalist Party’s (KMT) efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), caused a national outrage and drew diplomatic condemnation on Tuesday after he arrived at the New Taipei City District Prosecutors’ Office dressed in a Nazi uniform. Sung performed a Nazi salute and carried a copy of Adolf Hitler’s Mein Kampf as he arrived to be questioned over allegations of signature forgery in the recall petition. The KMT’s response to the incident has shown a striking lack of contrition and decency. Rather than apologizing and distancing itself from Sung’s actions,
US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which