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Commercial Times: Go start your own business, college graduates

Commercial Times: Go start your own business, college graduates

Premier Sean Chen has been busy dealing with the economic downturn caused by the eurozone debt crisis, discussing ways to improve the economy at several forums with the business community. The overall economic picture is gloomy. Taiwan's unemployment rate hit a new high for the year in July, according to government statistics. The Council of Labor Affairs has reported that the average starting salary for new graduates is even lower than it was 13 years ago. Moreover, the stock market has been weak, and tax revenues have declined. In the meantime, the local brain drain crisis has become a hot topic, not to mention the government's money-losing "two trillion and twin star development program" introduced to develop the digital content and biotechnology sectors. In fact, these difficulties cannot be overcome by a silver bullet because they have been accumulating for a long time. Also, many of the problems, whether youth unemployment, a talent shortage, or financial woes, are systematic and cannot be reversed with just one or two policies. The authorities and society have unconsciously gotten bogged down in defeatism, thinking that Taiwan has no future even if more efforts are made. We believe encouraging college students to start their own businesses could give new hope for the country at a time when many are having trouble landing a job. Even if they find one, they can hardly support themselves with the low salaries they are paid, a consequence of Taiwan's industrial structure. The supply of labor far exceeds demand in existing industries, resulting in an average starting salary of NT$26,600 (US$887.99) for university graduates and only NT$23,000 for vocational college graduates, lower than those in 1999. The low pay level indicates that these jobs are basically "chicken ribs," something that would be too wasteful to give up but not important enough to be valued. Even if young job seekers accept them, they might not feel inspired or fulfilled. Low salaries and the brain drain are two sides of the same coin. Outdated sectors are unable to provide pay raises, let alone the promise that it will offer career development opportunities over the long term. Concepts such as continuing education and training are even more far-fetched at such companies. At the same time, senior staff and executives waiting for retirement block the salary growth and promotion opportunities of their younger colleagues. No wonder talented people with vision and leadership skills cannot be cultivated here. Thus, instead of trying to push young people into businesses without promise, why not encourage them to establish their own businesses using limited resources. For young people, they have little to lose by turning down a job that pays NT$25,000 a month. In addition, most rents for shops or apartments in Taiwan are low, except in a few areas in Taipei's more affluent districts. Telecommunication and Internet service fees are inexpensive and offer many new marketing channels, and goods can be shipped quickly and at low cost. To support young entrepreneurs, the government can create a more competitive environment, provide basic knowledge and training and reinforce the loan schemes that have existed for years. The loan program launched 40 years ago offers up to NT$2 million for a start-up that meets certain criteria at a 1.95 percent interest rate, with a grace period of one year. Young people have a real chance to succeed with the help of the government loans and some basic funds from their families. It should at least be easy for them to earn more than the threshold NT$25,000. The premier and the Cabinet should carefully consider how to give local young people opportunities and hope as they cope with the current predicament. We suggest that the government step up efforts to support young entrepreneurs through educational, financial and psychological measures. (Editorial abstract -- Aug. 28, 2012). (By Kendra Lin)