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.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
The military is conducting its annual Han Kuang exercises in phases. The minister of national defense recently said that this year’s scenarios would simulate defending the nation against possible actions the Chinese People’s Liberation Army (PLA) might take in an invasion of Taiwan, making the threat of a speculated Chinese invasion in 2027 a heated agenda item again. That year, also referred to as the “Davidson window,” is named after then-US Indo-Pacific Command Admiral Philip Davidson, who in 2021 warned that Chinese President Xi Jinping (習近平) had instructed the PLA to be ready to invade Taiwan by 2027. Xi in 2017
RSS