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Commercial Times: Signs of labor market downturn

Commercial Times: Signs of labor market downturn

Taiwan's unemployment rate in August was 3.9 percent, the lowest for that month in 15 years. The labor force participation rate and the number of employed people continued to rise, while the unemployment rate after seasonal adjustments did not increase. The labor market seemed peaceful and stable. But is the labor market really stable? If we look closely, changes can be seen in some of the data. The number of people who were out of work due to business closures or downsizing rose for two months in a row, reaching 115,000 in August, 5,000 more than in June. The number of workers on unpaid leave increased from 517 on Aug. 15 to 783 on Sept. 15. The labor demand-supply ratio dropped from 2.29 in May to 1.93 in August. These changes indicate that due to a slowdown in exports and industrial production, the labor market might take a downturn. Before the global financial crisis swept across the world in September 2008, there were no obvious changes in Taiwan's unemployment rate. At that time, however, the number of people who had lost their jobs due to business closures or downsizing rose from 127,000 in the first half of 2007 to 133,000 in the corresponding period of 2008. In the following months, Taiwan's unemployment rate continued to rise, exceeding 6 percent in July 2009. That month, the number of people who were out of work due to business closures or downsizing surged to 354,000. The increase in the number of people on unpaid leave is also an important indicator. In early 2009, when the global financial crisis was at its worst, over 900 companies in Taiwan sent their workers on unpaid leave at one point, which affected 239,000 employees. The labor demand-supply ratio is another barometer. Whenever the labor market makes a downturn, there are changes in this ratio. In 2010, when Taiwan's economy was finally bottoming out after the financial crisis, the labor demand-supply ratio rose to 1.26 from 0.82 in 2009. This year, the ratio has been decreasing, falling from a peak of 2.39 in March to 1.93 in August. There are already signs that the labor market might make a downturn. The Cabinet of Premier Mao Chi-kuo (???) should take precautions. (Editorial abstract -- Sept. 25, 2015) (By Y.F. Low)


Updated : 2021-08-06 10:44 GMT+08:00