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Taiwan’s growing wealth gap raises concerns: experts

Reporter Isabel Wang
Release time:2024/01/29 16:44
Last update time:2024/01/29 16:44
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TAIPEI (TVBS News) — Taiwan is grappling with a worsening wealth gap, as highlighted by the latest economic projections from the Directorate-General of Budget, Accounting, and Statistics (DGBAS).

The November forecast for the 2023 economic growth rate has been revised downward to 1.42%, making it the lowest in 14 years and the weakest economic performance since the global financial crisis.

 

This growing disparity in economic gains has primarily benefited a select few, particularly in the electronics industry, leading to an increasingly broad wealth divide, experts have pointed out.

"Our income sources are driving Taiwan's wealth gap. A significant portion of our income is derived from labor, but even within the same company, we witness an 'M-shaped' phenomenon," said Hsin Ping-lung, an associate professor at National Taiwan University's Graduate Institute of National Development. "This means that high-income individuals are earning even more, while low-income individuals remain consistently at a low level."

"The income gap between high and low earners within the same company can expand to dozens of times," he added.
 

In 2022, the income gap index between the highest 20% of households and the lowest 20% was 6.15 times, compared to 6.08 times in 2016.

This issue is not unique to Taiwan but is part of a global trend. The charity organization Oxfam stated that since 2020, the wealth of the world's five wealthiest individuals has doubled, while nearly 5 billion people have become poorer.

"The most substantial portion of non-salary income comes from property and capital gains. This reflects that wealthy individuals can use their money to generate more wealth, allowing them to accumulate more assets," emphasized Hsin.

Addressing the widening wealth gap requires more than just imposing luxury taxes or taxing the wealthy. According to experts, the key lies in improving the lives of low-income families.

Meanwhile, basic living costs are on the rise in Taiwan, with DGBAS data revealing that the average rent index for the first 11 months of 2023 reached 2.16%, hitting a 27-year high.

"Regardless of whether you are rich or poor, you need a place to live. Market mechanisms should not dictate the cost of housing, as rents will continue to rise. This is why the government needs to intervene at this point," said Shin.

As low wages and high living costs affect more people, the government faces the challenge of addressing social issues and ensuring that resources are not concentrated in the hands of a few.

The Taiwan Briefing

Taiwan Business

#Taiwan#wealth gap#economic forecast#income inequality#DGBAS#electronics industry#global trend#Oxfam#low wages#high living costs
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