Taiwan's local election results are a shock to the progressives.

Like in the United States, a two-party system has led to the majority of voters swinging from one party to another as a form of punishment to the ruling party.

It is not that the Democratic Progressive Party (DPP) had performed that badly. Under the DPP, unemployment has gone down to its lowest in 18 years, average wages have grown to be higher than that of 2000 for the first time, and Taiwan's businesses are returning to Taiwan, as shown by falling investments in China over the last two years, partly fueled by the trade wars spearheaded by the Trump administration.

However, none of these factors have been felt by the average Taiwanese. Unemployment might have dropped, but many youths have also left for overseas jobs, and wages continue to be low, as compared to the other Asian Tigers. For a Taiwanese population who remembers being on par with South Korea, it is not acceptable that they have fallen behind.

Tsai Ing-wen (蔡英文) won the presidential election on the back of support from progressives, by appealing to marriage equality and the youth vote, but over the last two years, while she has made promises to the younger generation to increase wages, the reality has been underwhelming. Even as pay packets have grown for government workers, private sector workers still endure stagnant wages, and Tsai has not shown the same strong support she did before the 2016 presidential election for same-sex marriage. She is therefore seen as neglecting the progressives who helped her into power, as well as independence supporters who traditionally make up the DPP's base. Instead, she decided to embrace the conservative Christian faction in her party, which in turn has led the progressives to desert her.

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But Tsai is stuck between a rock and a hard place. On the one hand, she recognizes she needs to increase wages to ensure the youths are given hope, but on the other, she feels she has to attract Taiwan's companies, most of which are in China – the Taishang – back to Taiwan to ensure they have jobs. But she also has to ensure costs are low, so that those companies will return rather than chase low wages elsewhere, which consequently demands the continued depression of wages here.

Companies have begun embracing corporate social responsibility, and the government has implemented new laws to require them to reveal the average wages they pay to workers. But these measures are seen as piecemeal, and even if the policies are well-intended, it would take many years for them to take effect, and for wages to grow.

But the youths are impatient. To them, wages should be easy to increase. If South Korea can increase its minimum wage by 16 percent in one year, there is no reason why the minimum wage must only increase by only 5 percent a year in Taiwan. To be fair, under Tsai, the minimum wage has increased faster than it has in the last two decades, but with Taiwan's cost of living being higher than other countries with a similar level of minimum wages, Taiwan's minimum wage is simply unjustifiable, especially when across the sea, China is able to offer higher wages.

On top of that, many Taiwanese do not recognize that Taiwan is still a young democracy undergoing transition, and therefore it is natural that this transition will be messy. It does not help that the Kuomintang (KMT), which ruled Taiwan under a dictatorship for 40 years, continues to try to sabotage the DPP's rule, and persists with the politics of throwing chairs in the Legislative Yuan. In order for democratic transition to evolve, it requires all political parties, as well as civil actors, to work together, to move Taiwan along. However, with the KMT and some civil society groups being aligned or even funded by China, this has allowed Beijing to sabotage Taiwan's democratic progression. As such, while Taiwan is undergoing an important democratic episode, its development is being compromised by China and the KMT.

Credit: Reuters / TPG

But Tsai has to take responsibility for not having taken Taiwan in a direction that is more progressive. After being in power, she decided to continue with pro-business policies, just like the KMT. Nothing wrong with this approach, Sweden has done the same in its socialist democratic system. However, the difference is that, Sweden also has a strong social welfare system, and high wages. An argument would be that instead of enticing Taiwan's big companies to come back to Taiwan, Tsai should have simply grown the wages of Taiwan's workers, stoking demand and swelling savings, and in turn allowing them to create new businesses. As it is, by trying to attract Taiwan's companies back from overseas, Tsai is only attracting those who have left for China because it enabled them to pay low wages.

But for Tsai to be willing to make such a socially progressive move would require, perhaps in the DPP's perspective, a major gamble. There is no certainty it would work. Moreover, even if Tsai did try an alternative method, wages would still take time to grow, likely longer than a single presidential term, and we are back to the same question, that the Taiwanese do not have the patience to wait. As such, what is Tsai to do?

A problem with the DPP, as with most of Taiwan's companies, is that they do not know how to market themselves. Some of Tsai's policies might not be popular with workers, but on the other hand, the president has been trying to improve Taiwan's economic environment, and there are signs of these policies bearing fruit. But the DPP does not talk about their achievements enough. And in this vacuum, confidence in their rule festers, and as such they aren't able to profit from their efforts. Yes, Tsai should shun Singapore's authoritarianism, but if there's one thing her administration could learn from Singapore, it is that Singapore markets itself extremely well – so well in fact that only when you visit do you realize how much plastic surgery Singapore has done.

In the end, Taiwan's battle was fought on a very simple concern – wages. Whereas the concern in some countries has been that wages have been depressed and inequality has widened because of immigration, Taiwan has not faced the same effects of immigration due to a relatively low immigrant population. But on the other hand, Taiwan's youths have voted for DPP precisely because they believed that Tsai could change all that. To them, Tsai was their Bernie Sanders. But she ended up not being the progressive they expected, and they are now turning to Trump, in the hope that things might change. This is why in Kaohsiung, people have turned to KMT politician Han Kuo-yu (韓國瑜) for mayor, who is a Trump-esque figure, though with some important distinguishing features.

As long as Taiwan is stuck in a two-party system, it will not be able to transcend this trap.

But Taiwan has tried the KMT for decades, and it was the KMT which sold Taiwan's interests to China during their rein from 2008 to 2016, and it was the KMT that ensured Taiwan's minimum wage skulked around at NT$22,000 (US$712) per month. The irony is that Taiwan has decided to embrace a KMT which has created the problems that DPP is trying to undo. Underneath it all, the DPP simply did not know how to let people know that they have been trying to do their job, and that they have been trying to undo what the KMT had entrenched for years, which is going to take a long time.

Credit: Reuters / TPG

But how do you tell this to a population who feels that Taiwan has run out of time, and who do not have the patience to wait? Moreover, Taiwan's political landscape is such that if you feel that one party is not working, you punish it and vote for another. As long as Taiwan is stuck in a two-party system, it will not be able to transcend this trap, and the DPP would not be able to work towards longer-term progressive goals. As such, it is in Tsai's interests to strengthen the other political parties, especially the Third Force progressive parties. Tsai has to find allies among parties like the New Power Party and the Social Democratic Party if it wants to curb the conservative impulses of her own party, and to ensure that when youths decide to turn away, they would not turn to a KMT but towards Third Power progressive parties which would help to consolidate Taiwan's democratic development.

Tsai has worked hard over the last two years; her New Southbound Policy has helped increase Taiwan's tourist arrivals to record numbers, and to diversify Taiwan's partners with democratic allies among other like-minded countries. But all this hard work will unravel if the DPP continues to lose the support and confidence of the populace. Understandably, as a president, Tsai might feel the need to become more conservative when she becomes the leader of a country, and not just of a party. But perhaps she had made a costly gamble. KMT supporters were never going to turn DPP Green all of sudden, so that is always going to be a lost cause. But within the DPP, Tsai staked her bet with the conservative faction of her party, which in all likelihood would have never switched camps to the KMT, since the older conservative voters are also independence supporters, which the KMT fervently rejects.

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As such, Tsai's mistake was not embracing the youths and progressives which she had worked so hard to win over, who are now falling back into the KMT's arms. The youths do not have strong pro-China or strong anti-China sentiments. They want jobs and high wages, and if they cannot see this in front of their eyes, then the independence issue becomes less relevant.

Tsai has less than two years left in her term as president. She hopes to carry through her reforms, but if she is to hope to secure a second term as president, she needs to show that she is willing to be a strong progressive, at least in terms of ensuring workers and their wages see real improvements.

Tsai had her chance to do it when the DPP controlled both levels of government, but with the KMT gaining a stronger foothold now in local governance, Tsai might face a challenge. She needs to seek allies with other Third Force socially progressive parties, as well as to strengthen the laws to support the work that labor unions do, so that they can do the dirty work of negotiating for higher wages for her. It is no longer the time for Tsai to consolidate the DPP's power, but to diversify political power, so that while her hands are tied with how much she can push businesses, others will push for her where she cannot.

And perhaps Tsai would need to make the right bet. She won because she was seen as a progressive. She lost because she is no longer seen as one. Perhaps one thing the Taiwanese share with citizens in other countries are that they are willing to try an outsider. And if Tsai is not the outsider they need, then Han Kuo-yu might well be, as Kaohsiung voters have shown. And if there are no outsiders to embrace, the Taiwanese have shown that they are willing to go back to the tried and tested. Never mind that Taiwan's problems have been many created by the KMT.

If Tsai wants to secure a second term, then she jolly well has to let the Taiwanese know she is doing a better job than the KMT ever has, and she has to be willing to show the Taiwanese that she is the progressive that originally voted for.

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