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Commercial Times: Learn from U.S., Korean job creation initiatives

Commercial Times: Learn from U.S., Korean job creation initiatives

A proposal to add a clause to the disputed Industrial Innovation Bill that would give subsidies to small and medium-sized enterprises (SMEs) for new hirings has been harshly criticized as a waste of taxpayers' money and an example of pork barrel politics.
However, we believe the proposal is a necessary and legitimate step, similar to the job promotion measures adopted in the United States and South Korea recently to address their unemployment problems.
The U.S. Senate passed a bill 10 days ago that would offer up to US$17.6 billion in social security tax exemption for American companies that hire people who have been out of work for more than 60 days. If people in this category are hired for more than one year, their employers will be given an additional US$1,000 in tax refund.
The bill was initiated by the Democratic Party and secured the support of 11 opposition Republican senators.
Meanwhile, South Korea is implementing a short-term employment promotion program that provides financial aid for SMEs that hire new workers, and is also planning to offer tax incentives to create more jobs.
These initiatives are an indication that encouraging SMEs to hire more workers has gradually become an important policy of major countries around the world, amid rising unemployment associated with economic globalization. The main reasoning behind this development is that SMEs tend to be labor-intensive industries that have a strong potential to create jobs.
Article 20 of the draft Industrial Innovation Bill reflects a global trend and deserves the support of lawmakers from the ruling and opposition camps.
SMEs have traditionally formed the backbone of our economy.
According to a 2006 commercial and industrial census, local SMEs only used 22 percent of national resources and employed 64 percent of the country's workforce. If the number of employers was also included, local SMEs accounted for 76.6 percent of Taiwan's total working population.
Nonetheless, the government allowed more than NT$1 trillion in tax reductions and exemptions for the high-tech sector between 1993 and 2008 under the now defunct statute on encouraging industrial upgrade. Why has no one ever questioned the propriety of such concessions to the high-tech sector? The time has come for those who look down on SMEs to change their way of thinking in order to right the imbalances in global economic development. (April 5, 2010) (By Sofia Wu)




Updated : 2021-06-15 16:19 GMT+08:00