http://www.taipeitimes.com/News/biz/archives/2008/08/23/2003421143

Inflation cutting into real wages

WAGES DOWN, UNEMPLOYMENT UP: A government report said that real wages fell
2.36 percent and the unemployment rate hit 4.06 percent, or 442,000 people,
last month

By Crystal Hsu
STAFF REPORTER
Saturday, Aug 23, 2008, Page 12

Sustained inflation continued to hit incomes as real wages fell 2.36 percent
in June and were expected to fall further by the end of the year, the nation’
s statistics agency said yesterday.

The Directorate General of Budget, Accounting and Statistics (DGBAS) said
nominal wages averaged NT$37,003 (US$1,185) in June, down 0.41 percent from a
month earlier.

“The figure marked a 0.75 percent increase year-on-year, but translated into
a drop in real wages as inflation rose 3.89 percent for the same period,”
 said Huang Jiann-jong (黃建中), deputy director of DGBAS’ census bureau.
Real wages posted a decline of 2.01 percent in May.

Huang pinned the blame on imported inflation, which has pushed up fuel, raw
material and food costs and trimmed corporate profits.

“The situation is likely to worsen as consumer prices jumped 5.92 percent
year-on-year last month and nominal wages are unlikely to change much,”
 Huang said.

Huang dismissed concerns about a sharp increase in the misery index, noting
that while the consumer price index keeps rising, domestic labor
participation has remained stable.

The unemployment rate was 4.06 percent, or 442,000 people, last month, up
0.11 percent, or 14,000 people, from June, Huang said, citing the DGBAS
report.

Huang attributed the increase to part-timers and new college graduates
entering the job market. They accounted for 5.03 percent of the jobless
population.

“The number marked the highest in history, but I believe they will soon land
jobs after adopting a more pragmatic approach,” Huang said.

He pointed out that college graduates constituted 22.5 percent of the nation’
s labor force in the first seven months of this year, up from 10.8 percent a
decade ago.

Huang backed up his contention with the fact that seasonally adjusted
unemployment stood at 3.91 percent last month, up 0.03 percentage points from
a month earlier, which indicated that labor participation was stable.

Fifteen-to-24-year-olds were 12.73 percent of the jobless population, the
biggest by age group, the report showed. It said that the productivity index
stood at 147.73 points last month, up 0.85 percent from a year earlier, while
the labor cost indicator dipped 2.32 percent.

The report showed that disposable income for individual households averaged
NT$924,000 last year, with the top 20 percent possessing 5.98 times as much
disposable income as the lowest 20 percent counterparts.

The figure marked a 0.03 fall compared with 6.01 times in 2006.

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