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Taiwan's wage levels expected to rebound in 2nd half of 2010: CEPD

Taiwan's wage levels expected to rebound in 2nd half of 2010: CEPD

Taipei, Dec. 28 (CNA) Although Taiwan's economic recovery has continued gathering pace, wage levels are not expected to rise until the second half of next year, an official said Monday.
"Our wage levels are indeed unusually low as they have been declining for several years, " said Hu Chung-ying, vice chairman of the Council for Economic Planning and Development (CEPD).
He attributed the steady fall to a combination of factors, including ever slimmer profits from electronic OEM orders, mounting competition from cheap Chinese goods and changes in Taiwan's industrial structure.
Thanks to a global economic recovery, the CEPD's overall monitoring indicator for Taiwan's economic climate flashed a "yellow-red" light in November, marking the first time in 25 months that the country's economic activity has been seen as heating up.
With Taiwan Semiconductor Manufacturing Co. (TSMC) announcing last week a 15 percent pay raise for its employees from next year, many wage earners are expecting similar good news.
Hu said if local companies post stable gains as the global economic recovery gains momentum, they will more likely raise their employees' salaries or wages.
"Judging from the current trend, domestic wage levels will rebound in the second half of 2010," he predicted.
Hu said the electronics sector is expected to lead the way in raising pay levels, followed by the financial sector.
Conventional industries and the public sector may lag behind in adjusting pay rates, he predicted.
The CEPD official said rising pay levels are critical to economic growth because only with gains in income will private consumption see substantial growth.
That may take some time, however, according to Hu, who observed that wage levels are generally adjusted only after the economy bottoms out of a recession and grows steadily for two consecutive quarters.
Noting that Taiwan's economy began to show signs of recovery in October, when the monitoring indicator flashed a green light to signal stable growth, Chang said November's "yellow-red" light indicated that the economy's recovery is on a steady track.
(By Erin Ho and Sofia Wu)




Updated : 2021-05-14 01:47 GMT+08:00