M-shape society trend getting worse: DGBAS
September 4, 2008, 12:00 am TWN
TAIPEI, Taiwan -- Taiwan’s moved further toward becoming an M-shaped society in 2007, with both the highest and lowest income-earning segments in the country growing to new highs, according to a government statistical report released Tuesday.
The report authored by the Cabinet-level Directorate General of Budget, Accounting and Statistics (DGBAS) said that the number of people with an annual income of at least NT$2 million (US$63,091) broke the 100,000-mark for the first time last year to hit a record high of 101,554.
On the other hand, the number of people who earned less than NT$200,000 in 2007 reached 1.23 million, a five-year high, the DGBAS report said.
While only 0.8 out of every 100 local residents earned NT$2 million or more last year, the number of those in this “rich men’s club” increased by 11,308, or 12.5 percent, from the year-earlier level.
Meanwhile, 7,072 more people had annual incomes of less than NT$200,000 than in 2007, a 0.5 percent year-on-year rise. It marked the second consecutive year that the number of people in the lowest income-earning group increased.
Noting that the growing gap between rich and poor is a general world trend, a DGBAS official said Taiwan was no exception.
When Taiwan’s 7.41 million households were divided into 10 tiers based on annual income in 2007, the richest 740,000 households had disposable income of about NT$1.67 million, roughly 5.2 times the NT$320,000 average disposable income of the bottom 740,000 households, the official said.
“The gap was the third highest, second only to 2001’s 5.33 times and 2002 and 2006’s 5.25 times,” the official added.
The concept of an “M-shaped society” was first proposed by Japanese business strategist and writer Kenichi Ohmae in 2006. He argued that income distribution in many societies around the world had become “M-shaped.”
In a well-developed modern society, he said, income segments form a “normal distribution” pattern, and the middle class forms the bulk of the society.
In an “M-shaped society,” however, the middle class gradually disappeared, according to Ohmae. A few people in the middle class might climb the ladder and squeeze into the upper class, while the others in the middle class gradually sank to the lower classes.
These people experience a deterioration in living standards, facing the threat of unemployment or a decline in their average income.