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Taiwan’s wealth gap hits decade high amid economic struggles

Reporter Isabel Wang
Release time:2023/11/05 18:26
Last update time:2023/11/06 09:39
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TAIPEI (TVBS News) — As Taiwan grapples with the challenges of high inflation, escalating living costs, and stagnant wages, economic inequality has intensified, pushing the wealth gap to its highest point in a decade.

Data from the Directorate General of Budget, Accounting, and Statistics (DGBAS) reveals that in 2022, the average income of the top 20% of Taiwanese families approached NT$2.3 million. In stark contrast, the bottom 20% averaged just NT$365,000.

 

This disparity, amounting to nearly NT$1.9 million, translates to an income gap 6.15 times wide.

Hsin Ping-lung, an associate professor at the National Taiwan University's Graduate Institute of National Development, observed, "The industrial structure has transitioned from being labor-intensive to capital-and-knowledge-intensive. As a result, GDP profits predominantly benefit capitalists and knowledge workers, leaving the broader labor class with a smaller share."

He further commented on the financial market's recent vibrancy, noting, "It offers ample opportunities for affluent investors to amplify their wealth through financial maneuvers."
 

An analysis of Taiwan's labor share of GDP from 2012 to 2021 indicates a concerning trend. The proportion of employee compensation has dipped from 45.77% to 43%, a significant decline of 2.74%, marking an all-time low. In essence, the economic rewards for workers have been dwindling.

Darson Chiu, a researcher at the Taiwan Institute of Economic Research, weighed in, stating, "Structural economic shifts, be it a pandemic or a financial crisis, tend to exacerbate the wealth divide." He emphasized that minority groups, especially in Asian contexts, bear the brunt of these disparities.

Chiu elaborated, "Many Asian nations lack robust labor unions to champion workers' rights in negotiations with employers. This imbalance grants employers a dominant position in determining wages."

In a candid admission last October, DGBAS Minister Chu Tzer-ming recognized the government's role in perpetuating income inequality. He advocated for enhanced income distribution strategies, encompassing a range of fiscal and social welfare initiatives.

However, a looming concern remains. If wage growth fails to keep pace with inflation and tax structures persist unchanged, the divide between the affluent and the impoverished will only widen.

The Taiwan Briefing

#Taiwan#Wealth gap#Inflation#Wages#Economic inequality#DGBAS#GDP#Taiwan’s wealth gap in 2022#Income disparity among Taiwanese families#Labor share of GDP in Taiwan
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