Taiwan economy: an aging tiger in need of cubs

Sun Dec 27, 2015 4:54pm EST
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By Faith Hung

TAIPEI (Reuters) - Jason Tsai is among the few in Taiwan with excellent English, but two years after graduating from university the highly sought language skill has failed to secure him a well-paying job.

Tsai has been pulling in an average monthly pay of T$15,000 ($455) through part-time work, below the minimum wage of T$22,000 for college graduates and one-fourth of the retirement-pension received by state employees.

"I cannot afford a place of my own with my low income... All I have been able to find were part-time jobs," the 25-year-old said.

The plight of young workers such as Tsai highlights a serious problem for Taiwan which has gone from a young and vibrant Tiger economy to aging and unsteady in just two generations: the working-age population is not growing fast enough, nor earning nearly enough to pay for their parents' retirement.

As Tsai struggles to find a better paying job in a recession-hit economy, a wave of barely middle-aged mostly government employees are racing to retire on generous taxpayer-funded pensions before these are watered down.

To make matters worse, a government policy designed to protect young workers during the 2008-2009 global financial crisis has created a perverse incentive for employers to lock young workers into a minimum wage.

The dissatisfaction among the youth has boiled over into student protests and has become a hot-button issue for voters as Taiwan goes to the polls next month.

Tsai isn't waiting for politicians to come to the rescue, and is instead looking to move to Japan to secure a better job.   Continued...

People throw smoke grenades during the annual Labour Day protest in front of Presidential Office in Taipei, Taiwan, in this May 1, 2015 file picture. The head banner reads, "shorten working hours; no overfatigue." REUTERS/Patrick Lin