Impacted by the global economic downturn, Taiwan`s businesses have been cutting back and downsizing workforce to stay afloat, which has bitten into the employment situation on the island. A recent survey by the Cabinet-level Directorate General of Budget, Accounting & Statistics (DGBAS) shows that Taiwan`s jobless rate hit a record high of 5.82% in May of this year, equaling to 633,000 persons out of work, also the highest of its kind.

After seasonal adjustment, the jobless rate has risen the 14th times consecutively to reach 5.84%. The long-term unemployed or out of work for over a year reached 99,000 persons, the highest since February 2004, of which nearly 60% are high-school grads or lower and 25% college educated or above.

May saw a new high of 354,000 persons become unemployed involuntarily, due to plant or company closures as well as business shutdowns. From September 2008, the eruption of the global financial tsunami, till May of this year, those let go from work increased by 223,000 persons.

Influx of Job Hunters
Huang Chien-chung, a senior official at DGBAS, indicates that, despite Taiwan`s economy having bottomed at the end of the first quarter, the jobless rate seems to be climbing, exasperated by a new influx of fresh graduates, estimated at 320,000 persons, from colleges, universities and graduate schools who are or will be job hunting.

Usually about 40% of new graduates start to look for work right after graduation, meaning that 140,000 job seekers will join the competition, helping to raise the unemployment rate in August and September, Huang says.

The DGBAS figures show that the number of workers hired by domestic enterprises shrank by 370,000 persons over the past eight months. And in the first four months of this year the average monthly pay in industries and services, including occasional perks as yearend bonus, came to NT$47,107 (US$1,427.5 at US$1 = NT$33), dropping an annual 8.45%; while the average regular monthly pay was NT$35,488 (US$1,075.4), down by 3%, both the largest declines of their kinds in recent years.

The Council of Labor Affairs (CLA) points out that the number of first-time unemployment benefit applications broke 30,000, for the first time, to total 31,000 in December 2008, peaked at a record high of 35,000 in February of this year, dropped a month later to 28,000, further dipping to 21,000 in April, and then 16,000 in May. Such declines may be driven by the corresponding drop in the number of employees forced to take unpaid leave, which came to 140,000 persons in May, subsiding from February`s 240,000 persons. Employers in Taiwan, especially in the IT sector, had been asking workers to stay home without pay due to sluggish orders received.

Recovering Economy
Vice President Vincent Siew, an economics expert and former chairman of the Chung-Hua Institution for Economic Research, says that Taiwan`s economy has gone through its most difficult time and started to regain strength. However, a full recovery may be six to 12 months away. So, the jobless rate will very likely keep rising, exceeding 6% in the next few months and probably peaking in September.

Siew says that Taiwan`s economic recovery depends mainly on reviving domestic demand, recovery of the American market, and business creation in China by domestic enterprises. He further forecasts that Taiwan`s exports this year may remain lackluster although exports bounced back a little to US$15.59 billion in March, which still lags far behind the average monthly total of US$20 billion in 2007.

DGBAS predicts that Taiwan`s economic growth this year may be negative 2.97% while foreign counterparts peg such rate at minus 6%-10% for Asian economies, including Taiwan, Singapore, South Korea and Hong Kong.

Internship Opportunities
Aiming to help college graduates to find jobs, the Ministry of Education (MOE) says that the government will hold 14 job fairs around the island in July on major college campuses, with the MOE also working with businesses to offer internships that will create 33,500 jobs for some 13,000 college graduates. The job fairs are designed to raise the success rate of placing college graduates in internships.

So far, 5,567 graduates have accepted internships offered by businesses, with a placement rate of 16.62%. With the CLA also pitching in during July, the MOE hopes to achieve the 90% placement rate target by the end of the month.

Complying with the central government`s project to boost employment, the Taipei County Government recently created 637 temporary jobs that pay NT$800-2,200 (US$24.24-66.66) daily, attracting 4,137 applicants. Some of the candidates even have master`s or doctorates, as well as having worked for leading enterprises before being laid off due to the downturn. The fierce competition has frustrated many of the applicants, who look to the government for more jobs, even if temporary work.

More Temp Jobs
Seeing the uncertain business climate, increasingly more enterprises in Taiwan, besides downsizing operations, will be recruiting part-time workers in the future to reduce operating cost. The Cabinet-level Council for Economic Planning and Development (CEPD) believes the Japanese-style cradle-to-grave employment may gradually disappear in Taiwan, which will see increasing part-time or temporary jobs.

Unconventional employment modes or flexible and temporary jobs have been emerging in the wake of the global recession. Such cost-cutting employment means make up less than 10% of the total in Taiwan, far lower than that Japan`s 24.5% and South Korea`s 14.6%.

The CEPD says that South Korea, Japan, Holland and Germany have been applying various forms of "job sharing" to cope with the hard times. Japan`s version is to shorten work duration to avoid laying off workers and minimize social cost, with the Japanese government having budgeted US$19 billion to subsidize enterprises that adopt such system.

Besides cutting salaries paid to middle and senior managers, South Korean businesses also create vacancies for new job seekers. Starting February of this year, the South Korean government has budgeted US$260 million to subsidize enterprises that adopt job-sharing, as well as setting aside US$71.7 million to pay 40% of salaries to those forced to take unpaid leave. (JL, June 2009)

(by Judy Li)