Taiwan youth struggle to find well-paying jobs

Dissatisfaction among young people a hot-button issue in coming presidential polls

A demonstrator in a Labour Day protest in front of the presidential office in Taipei on May 1. The dissatisfaction among youth over the job situation has boiled over into student protests and become a hot-button issue for voters.
A demonstrator in a Labour Day protest in front of the presidential office in Taipei on May 1. The dissatisfaction among youth over the job situation has boiled over into student protests and become a hot-button issue for voters.PHOTO: REUTERS

TAIPEI • Mr Jason Tsai is among the few in Taiwan with excellent English, but two years after graduating from university, the highly sought language skill has failed to secure him a well-paying job.

He has been pulling in an average monthly pay of NT$15,000 (S$640) through part-time work, below the minimum wage of NT$22,000 for college graduates and one-fourth of the retirement pension received by state employees.

"I cannot afford a place of my own with my low income... All I have been able to find were part-time jobs," the 25-year-old said.

The plight of young workers such as Mr Tsai highlights a serious problem for Taiwan which has gone from a young and vibrant "Tiger" economy to ageing and unsteady in just two generations: the working-age population is not growing fast enough, nor earning nearly enough to pay for their parents' retirement.

As Mr Tsai struggles to find a better-paying job in a recession-hit economy, a wave of barely middle-aged, mostly government employees are racing to retire on generous taxpayer-funded pensions before these are watered down.

To make matters worse, a government policy designed to protect young workers during the 2008 to 2009 global financial crisis has created a perverse incentive for employers to lock young workers into a minimum wage.

The dissatisfaction among youths has boiled over into student protests and has become a hot-button issue for voters as Taiwan goes to the polls next month.

Mr Tsai is not waiting for politicians to come to the rescue, and is instead looking to move to Japan to secure a better job.

A flight of young people in search of greener pastures is the last thing that Taiwan needs, especially as its rapidly greying population is diminishing the number of skilled workers required to propel the economy on its next growth phase.

In fact, the alarming drop in Taiwan's fertility rate to less than one per woman - which is among the lowest in the world - from around 1.7 in 2000, has created a major demographic challenge for policymakers.

As more of today's youths transfer the burden of caring for their parents to the state, government resources are getting stretched to breaking point amid spiralling health insurance and pension costs.

"Reforms need to be carried out soon or state employee pensions will collapse," Mr Wu Chung-cheng, deputy minister of the civil service ministry, told Reuters.

But fears of a political backlash have discouraged lawmakers from watering down a taxpayer-funded generous average monthly retirement pension of NT$60,000, even though a flagging economy can no longer sustain these costs.

Public debt burden is now at a record US$550 billion (S$774 billion), while pension costs are set to rise to an all-time high of 7.37 per cent, or NT$147.2 billion next year, of the total government budget.

And the pressure on finances continues to grow as state employees rush to lock in the generous pension. Between 2010 and 2013, the number of retired state employees jumped more than 50 per cent to 32,000.

The lopsided pension plan is causing resentment among those like Mr Tsai. "What the state employees have is like a dream that would never come true for our generation," he said.

The dramatic ageing of the population means that the government will be forced to act sooner rather than later.

Official statistics show that those 65 and older are growing faster than in most Asian countries, making up 12 per cent of the total population of 23 million last year.

By some estimates, one in five Taiwanese will be 65 or older by 2025, an unenviable future for an ageing Tiger economy and its younger people.

"As Taiwan's population is ageing at a fast rate, it is putting a burden on young people who are already pressured by their low wages," said Mr Wu of the civil service ministry.

"Everybody knows that these are big problems facing Taiwan."


A version of this article appeared in the print edition of The Straits Times on December 29, 2015, with the headline 'Taiwan youth struggle to find well-paying jobs'. Subscribe