A survey by online job bank yes123 showed that 50.2 percent of local companies said they had raised wages in the first half of this year, compared with 44.8 percent in the same period last year. However, the same survey showed that only 16.3 percent of workers reported pay increases in the first half — albeit slightly higher than the 14.2 percent reported in the same period last year.
For the second half of this year, 54.7 percent of companies said they would raise wages, up from 49 percent in the same period last year and the highest for the second-half period in six years. Companies are seeking to increase wages by an average of 4.1 percent, while 13.3 percent said they are planning a more than 10 percent raise, the survey showed.
In general, wages are rising. The good news is that employers want to improve recruitment incentives and retain workers. The bad news is the move is, to a certain extent, a response to inflation, which in economic terms means a general increase in prices and a drop in the local currency’s purchasing power.
Indeed, most wage earners are under growing pressure due to soaring living expenses. Despite a tight labor market and pay increases, real regular wages grew a mere 0.22 percent from a year earlier in the January-to-May period due to rising inflation, official data showed on Friday. Although rising corporate profits are expected to drive further wage increases in the second half of the year, inflation is likely to remain sticky and continue limiting gains in real wages.
Inflation in Taiwan is undergoing a structural upward shift due to factors such as the green energy transition, a recovering economy, industrial transformation and labor shortages, the central bank has said. Nevertheless, rising rents have also started to filter into inflation amid soaring property prices and deteriorating housing affordability.
Last month, the consumer price index (CPI) grew 2.42 percent year-on-year, bringing second-quarter CPI growth to 2.2 percent — the 13th consecutive quarterly increase above the central bank’s 2 percent target, data released by the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed. Overall, CPI growth is forecast to continue to exceed 2 percent for three consecutive years after factoring in an average 11 percent increase in electricity rates from April, the central bank and the DGBAS have said — a rarely seen phenomenon over the past 30 years. This has raised concern over whether government-proposed wage increases for military personnel, civil servants and public school teachers next year would push further up inflation and even trigger an inflation spiral, or the so-called wage-price spiral.
Macroeconomic theory says the spiral starts as rising wages increase disposable income, which then boosts demand for goods and triggers more price increases. As workers expect prices to rise, they ask for pay raises to keep up, which in turn leads to higher production costs, forcing companies to raise prices even more, adding further upward pressure on inflation, and so on.
The spiral does not seem to be a concern for the central bank, as Governor Yang Chin-long (楊金龍) last week said a pay raise for public workers would not fuel inflation, unlike minimum wage hikes that would drive up production costs across all business sectors. One more encouraging sign is that the stubborn wage-price spiral of the 1970s is unlikely to be repeated this time, as there are no special events, such as the energy crises that triggered social panic and amplified inflationary expectations at that time. After all, wages in Taiwan have not kept up with inflation for many years, with 67.73 percent of Taiwanese workers being paid less than the national average. There is no need to worry about an inflationary spiral.
Trying to force a partnership between Taiwan Semiconductor Manufacturing Co (TSMC) and Intel Corp would be a wildly complex ordeal. Already, the reported request from the Trump administration for TSMC to take a controlling stake in Intel’s US factories is facing valid questions about feasibility from all sides. Washington would likely not support a foreign company operating Intel’s domestic factories, Reuters reported — just look at how that is going over in the steel sector. Meanwhile, many in Taiwan are concerned about the company being forced to transfer its bleeding-edge tech capabilities and give up its strategic advantage. This is especially
US President Donald Trump’s second administration has gotten off to a fast start with a blizzard of initiatives focused on domestic commitments made during his campaign. His tariff-based approach to re-ordering global trade in a manner more favorable to the United States appears to be in its infancy, but the significant scale and scope are undeniable. That said, while China looms largest on the list of national security challenges, to date we have heard little from the administration, bar the 10 percent tariffs directed at China, on specific priorities vis-a-vis China. The Congressional hearings for President Trump’s cabinet have, so far,
The US Department of State has removed the phrase “we do not support Taiwan independence” in its updated Taiwan-US relations fact sheet, which instead iterates that “we expect cross-strait differences to be resolved by peaceful means, free from coercion, in a manner acceptable to the people on both sides of the Strait.” This shows a tougher stance rejecting China’s false claims of sovereignty over Taiwan. Since switching formal diplomatic recognition from the Republic of China to the People’s Republic of China in 1979, the US government has continually indicated that it “does not support Taiwan independence.” The phrase was removed in 2022
US President Donald Trump, US Secretary of State Marco Rubio and US Secretary of Defense Pete Hegseth have each given their thoughts on Russia’s war with Ukraine. There are a few proponents of US skepticism in Taiwan taking advantage of developments to write articles claiming that the US would arbitrarily abandon Ukraine. The reality is that when one understands Trump’s negotiating habits, one sees that he brings up all variables of a situation prior to discussion, using broad negotiations to take charge. As for his ultimate goals and the aces up his sleeve, he wants to keep things vague for
RSS