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Real wage decline widens

Inflation continued to erode incomes as the real wage decline widened to a record 2.72 percent in July, a report released yesterday by the Directorate General of Budget, Accounting and Statistics showed.

“Headline wages stood at NT$37,043 [US$1,153] in August,” Huang Jiann-jong (
黃建中), deputy director of the directorate’s census bureau, told a press conference. “The figure marked a slight increase of 0.11 percent from July, but translated into a decline of 2.71 percent in real wages as inflation rose 4.18 percent for the same period.”

Real wages posted a negative growth of 2.36 percent in June and 2.01 percent in May.

Again, Huang attributed the trend to imported inflation, which pushed up fuel, raw material and food costs.

Consumer prices accelerated 5.92 percent year-on-year in July, but slowed to 4.78 percent last month, leading officials and watchers to conclude that inflationary pressures had peaked and the nation could soon breathe a little.

Huang dismissed concerns about stagflation, but warned for the first time in four months that the labor market was displaying signs of a slowdown.

The report showed that the unemployment rate had climbed to 4.14 percent, or 452,000 people, last month, the highest in three years.

“Unemployment and other numbers show signs of structural change,” Huang said, pointing to a drop of 2.13 percent in the employee turnover rate during the same period, the second-lowest in the nation’s history.

The low turnover rate signified that industries have less need for new workers and people have less desire to change jobs, Huang said.

People with a college degree or higher rose to 5.26 percent of the unemployed population, compared with 5.03 percent in July.

More than 130,000 people lost jobs to business closures, the report said.

Overall unemployment for July was 4.06 percent, or 442,000 people, up 0.11 percent, or 14,000 people, from June, data showed.

(From Taipei Times; Date: Sep. 23, 2008)