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Vol.12 2010.2
TRENDS & MARKET UPDATE

-0.40% Increase in the Past 8 Years. Wage Growth in Taiwan Has Stagnated

Council for Economic Planning and Development (CEPD) pointed out that, affected by aging population, globalization and the increase of atypical employment, the average annual growth of real wages in the past eight years in Japan is -0.52% and almost stagnated, a phenomenon that could mirror Taiwan because, remarkably, the average annual growth rate of real wages in the past eight years in Taiwan is -0.40%, similar to the rate in Japan.

CEPD further illustrated the three reasons that cause the stagnation of wages growth rate: oversea relocation due to globalization, aging population and the increase of atypical employment.

Among the three reasons above, the increase of atypical employment has the greatest impact. Atypical employment, including part-time job, dispatching and short-term employment, accounted for only 20% in 1990 but for as high as 34% in 2007 of total employment, a high proportion seconds only to Netherlands and Australia. Since the wage of atypical employee is 40% less than that of typical employee, increase of atypical employment severely impedes the average wage growth in Japan.

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