What you need to know
Though the GDP per capita in Taiwan may be on pace to grow, few gains will be felt by workers.
Do workers in Taiwan have any reason to celebrate? Let’s take a closer look.
The minimum wage tells a different story. ’s and Japan’s have grown to the equivalent of NT$46,718 and NT$41,128 this year, respectively. But Taiwan’s minimum is still NT$25,250—or only 54% and 61% that of South Korea’s and Japan’s.
Projecting from annual rates of growth over the last six years, South Korea’s minimum wage would be NT$70,969 by 2028 and Japan’s would grow to NT$49,932. But Taiwan’s minimum wage would only grow to NT$31,865.
While Taiwan’s GDP per capita would exceed Japan and be roughly on par with South Korea, Taiwan’s minimum wage would still be only less than half that of South Korea’s (45%) and only two-thirds that of Japan’s (66%).
Also, Taiwan’s median was only NT$41,500 in 2020, lagging behind Japan’s (NT$88,210) and Korea’s (NT$70,153). Taiwan’s minimum wage was only about half that of Japan’s and 60% that of South Korea’s in 2019.
Based on their annual rates of growth over the last eight years, both Japan and South Korea’s median wages are expected to grow to above NT$90,000 by 2028. But Taiwan’s median wage would grow only to NT$47,323.
What about the higher costs of living in Japan and South Korea? If we adjust for , then Taiwan’s minimum wage would still have grown to NT$31,064 today if pegged to Japan, and to NT$37,784 if pegged to South Korea.
Based on the rate of growth in the last six years, Taiwan’s minimum wage would grow to NT$41,039 in 2028 and NT$52,772 if pegged to Japan and South Korea, respectively. But with Taiwan’s current rate, the minimum wage is set to grow to only NT$31,865.
If we compare the minimum wages of these countries with their GDPs per capita, we see that South Korea’s minimum wage has climbed from 15.3% of its per capita in 1988 to 60.7% in 2020. In Japan, the minimum wage has also grown from 30.4% of per capita in 1988 to 44.6% in 2020.
If trends continue both South Korea’s minimum wage and Japan’s minimum wage will continue to grow or remain at about 60% and 45% of their GDP per capita, respectively. But Taiwan’s minimum wage could decline further to only 28.9% of GDP per capita.
To be on par with Japan, Taiwan’s minimum wage would need to be at about NT$30,000 today, or NT$40,000 to be on par with South Korea.
Let’s look at median wages. Japan’s median wage has hovered at about 100% of its GDP per capita since 2010, while South Korea’s median wage has grown from 79.4% of its GDP per capita in 2010 to 97.2% in 2020.
But Taiwan’s median wage has declined from 70.1% of its GDP per capita to only 59.7% in 2020.
This means that less and less of Taiwan’s GDP economic production is being returned to its workers. To be on par with both Japan and South Korea, Taiwan’s median wage would need to be about NT$65,000 today, also about where Taiwan if median wage corresponds to the costs of living in Taiwan.
Taiwan’s GDP per capita will soon be at level with Japan and South Korea, but you can see that as compared to these two countries, very little of the GDP per capita is actually returned to the wages of workers, for both low- and middle-income workers.
What we need to focus on is not the GDP per capita, but whether wages have grown adequately to meet the cost of living needs of Taiwan’s workers. As I have written about in previous articles, Taiwan’s minimum wage is still by this measure.
There’s no need to be too excited over GDP per capita growth when workers still face stagnant wages, and the government does not want to do much to make them higher. I hope for a future in which growth redounds to the benefit of all, where reports of projected growth can truly be celebrated as a bounty for society.
TNL Editor: Bryan Chou, Nicholas Haggerty (@thenewslensintl)
If you enjoyed this article and want to receive more story updates in your news feed, please be sure to follow our Facebook.