In tune with the monthly unemployment rate of 3.86 percent in March — the lowest in eight years — the employed population recorded 1.28 percent growth year-on year to reach a monthly average of 10.37 million during the first three months of 2008, indicating a growing labor market, said Huang Jiann-jong, deputy director of the Bureau of Census under the DGBAS.

The unemployment rate in this year’s first three months marked 3.87 percent, Huang added.

The overall regular wage, which is calculated one month behind the employment statistics, also showed steady growth, marking an eight-year high at 1.84 percent year-on-year in the first two months of 2008.

But the global inflation affected the local consumer price index (CPI), causing it to grow 3.41 percent during the same period, which undermined the real wage growth to minus 1.52 percent, the worst level in 27 years, said Huang.

“The rising pace of regular wages has been relatively slow compared to that of consumer prices,” Huang went on.

He cited the low profitability of local companies and part-time employment as the major factors of the gradual increase, a result of fiercer competition in the increasingly globalized economy.

Touching on the country’s overall economy, Huang said the domestic labor market remained healthy, as the structure of the employment market has not changed despite the ongoing problem of an increasing unemployed population of people with tertiary education, which jumped to 282,000 in 2007 from 89,000 in 1997.

“The high salary demands of these young people has led them to accept only either voluntary or short-term unemployment, “ said Huang, noting this so-called “frictional unemployment” affects the local economy very little.

The March unemployment rate for college graduates stood at 3.88 percent, just 0.02 percent higher than the overall rate of 3.86 percent, according to the DGBAS.

“Compared with unemployment rates in other Asian countries like Japan and Hong Kong, which stood at 3.9 percent and 3.4 percent, respectively, the rate in Taiwan is nothing out of ordinary,” he went on.

Scholars are more concerned by both the slow pace of salary growth and unemployment among college graduates, as global inflation continues to eat away at the lukewarm economic rise.

“The small wage growth indicates a slow-growing local economy, in which the capacity and profitability of local industries are not performing at their best, “ said Lee-rong Wang, director of the Center for Economic Forecasting under the Chung-Hua Institution for Economic Research.

To cope with the import inflation caused by the skyrocketing commodity prices around the world, Wang said a prosperous local economy, or micro-economy, could help increase the nominal wage standard to compensate for the effects of the international situation.

Individuals also need to play a part to boost earnings, she added,saying that college students should upgrade their employability by developing skills that are unique compared to those of their peers.

“Taiwan’s economic outlook — and accordingly the wage standard — in recent years have not been as good as those of neighboring countries, which has driven many of our high-quality employees to seek work overseas,” she added.

Another way to tackle the low earnings, Wang suggested, would be to increase wages in the government sector.

“Labor history in Taiwan tells us that every time the government gets a raise, the private sector follows, as a result of labor market competition,” she said.

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