Taiwan’s ruling party: Reprioritising livelihood concerns?
Taiwan’s ruling party: reprioritising livelihood concerns?
WRITTEN BY ROY NGERNG
19 July 2023
In Taiwan’s local elections last year, the national ruling Democratic Progressive Party (DPP) suffered its greatest setback in 40 years. It lost three major cities in the north and won only five out of the 21 contested cities and counties. President Tsai Ing-wen resigned as DPP’s chairperson, and the DPP released a report acknowledging that its poor electoral performance was due to a "significant" loss of support from young and moderate voters.
With the presidential election coming up in six months, the DPP seems to have acknowledged that its past economic policies have been out of step with voter expectations. It is trying to win back voters by delivering policies aimed at uplifting livelihoods, but it is uncertain if these efforts will be enough to regain voter confidence.
Livelihood stagnation
According to a survey conducted by Taiwan’s United Daily News last year, the Taiwanese believe that the country’s liveability — especially in terms of high housing prices and low wages — requires the most urgent improvements. Indeed, after a period of stability from 2015 to 2018, Taiwan’s housing prices started escalating to become one of the most expensive globally. Likewise, among the advanced countries, Taiwan’s wages are among the lowest. Its minimum wage also increased at one of the slowest rates.
Any party which is serious about protecting Taiwan’s democracy and sovereignty would need to prioritise workers’ rights.
As a result, Taiwan’s housing price-to-income ratio is one of the highest among advanced economies today, second only to Hong Kong. Taipei’s house prices are more expensive than Luxembourg and Sydney, but Taiwan’s minimum wage is only a third of that of these countries. On top of that, Taiwan’s workers work the longest hours in the world and have one of the fewest vacation days among the advanced countries. Given the increasingly unaffordable housing and stagnant wages, Taiwanese youth seem to have lost confidence in the DPP’s ability to address their livelihood needs.
Taiwan’s minimum wage rose at a faster rate under President Tsai than under her predecessors and is experiencing consecutive years of growth for the first time since 1997. In 2017, the average starting salary of university graduates finally surpassed 2000 levels, after 16 long years. However, as a result of the US-China trade war, as the government started luring Taiwanese businesses back with promises of easy access to financing and land, the resulting influx of cash contributed to the surge in housing prices. After global food prices hit record highs in 2022, wage gains under Tsai’s administration were eroded. In the first quarter of this year, Taiwan’s average monthly wage saw its sharpest decline in seven years.
Thus far, only the New Power Party (NPP) has articulated a concrete target of increasing the minimum wage to (the equivalent of) USD 1,015 a month by 2024. Taiwan’s minimum wage currently stands at USD 856. In 2018, then-Vice Premier Shih Jun-ji proposed implementing a four- to six-year plan to increase Taiwan’s minimum wage to USD 973 by 2024, but this was shot down by President Tsai. Since then, Taiwan’s wage share has declined further from 45.8 per cent to 43.1 per cent and is one of the lowest among the advanced countries. In fact, Taiwan’s wage share has been declining since 1990.
Based on Numbeo’s cost of living estimator, Taiwan’s minimum wage would need to be USD 1,134 to USD 1,296 for a basic standard of living; it would be significantly higher in the northern cities due to the higher housing prices. Yet, as it is, a fifth of Taiwanese workers earn less than USD 973 and close to half earn less than USD 1,297. It is even worse for youths — over half of those below 30 years of age earn starting salaries of less than USD 973 and a quarter only earn the minimum wage. In other words, a fifth to half of Taiwan’s workers could be living in relative poverty. By last year, Taiwan’s wealth gap had risen to a ten-year high.
Changing electoral landscape
In 2016 and 2020, Tsai won national elections with over 55 per cent of the votes because of a backlash against China’s threats among voters. Yet, for the upcoming elections, the signs are changing. While Taiwan’s elections have traditionally been fought between the two major parties — the DPP and Kuomintang (KMT) — the Taiwan People’s Party (TPP) is gaining momentum.
Since 2016, voters have ushered the DPP into Taiwan’s executive and legislative bodies for two consecutive terms, in the hope that this would bring about change. However, to many youths and moderates, this hope was misplaced. This has provided an opening for the TPP to pry voters away. DPP is considered the party more likely to defend Taiwan’s nationhood while KMT and TPP are seen as more China-leaning. Even so, voter preference has thus far been almost evenly split among the parties. Young voters are increasingly gravitating towards the TPP. This is because they are disillusioned by the ruling party’s lacklustre attempts at improving their livelihoods; consequently, the DPP is seen as a one-trick pony that can defend Taiwan’s nationhood but lacks economic competence. However, while the TPP has been criticising the DPP’s failure to address the high housing prices and low wages, it has not come out with clear policy alternatives to differentiate itself. Neither has the KMT.
A key challenge is that none of the three major parties are economically left-wing in orientation – they do not seek to raise wages or increase social spending to bring down wealth inequality. They are predominantly right-wing or centrist-right at best, prioritising funding for businesses and subsidies that plug gaps at the bottom instead of fundamentally reforming Taiwan’s imbalanced economy. The NPP comes closest to the definition of left-wing, but it is not a major player. The DPP might be seen as a more ‘progressive’ party, and it did indeed run on a social welfare platform in the 1990s, but it abandoned this platform following the 2001 recession. Therefore, voters wanting any party to pay attention to their livelihood concerns had little choice except to engage in strategic voting by alternatingly punishing the party in power.
Will livelihood concerns take centre stage again?
Immediately after the DPP’s loss in last year’s local election, Taiwan’s executive branch passed a draft social welfare bill, which was approved by the legislature in May this year. There have been calls for enacting this law since 1998, and it took an electoral wake-up call for the DPP government to finally deliver it after 25 years. Details are scant, however, as the law only provides guidelines on the provision of social welfare and leaves implementation to the local governments. The ruling party also launched the second phase of its Youth Employment Investment Program in May this year, which aims to raise the monthly starting salaries of junior college and university graduates to USD 1,362 after one year on the job. Even so, the program presents no clear pathways to increase wages, which raises questions about the seriousness of the program.
The DPP’s report reviewing its election defeat last year noted that it needed to evaluate why it is perceived as “arrogant”, and why voters chose to “place checks and balances on the DPP [and] not to support it”. However, one wonders if the ruling party is now pushing through a series of legislative bills to be seen as committed, and to secure votes at the next election.
Any party which is serious about protecting Taiwan’s democracy and sovereignty would need to prioritise workers’ rights. For a start, the ruling party must show that it is committed to increasing the minimum wage to a level commensurate with the basic standard of living. When the Basic Wage Deliberation Committee meets in the third quarter of this year to discuss raising the minimum wage, it will indicate whether the DPP has learnt from its latest electoral loss.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Roy Ngerng is a researcher and journalist who writes about wage and economic stagnation in Taiwan. He was previously a social activist who campaigned on wage and social protection issues in Singapore. Image credit: Hao Pan/Unsplash (cropped).