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September 26, 2017

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Jobless rate for September forecast to show slight rise

TAIPEI--Taiwan's jobless rate for September will likely show a slight increase, on the heels of the recent mass layoffs by major technology and media enterprises, labor experts said Sunday ahead of an official jobs report that is due Oct.22.

Fubon Financial senior economist Rick Lo forecast a rise in the September jobs data of less than 0.1 percentage points from the previous month.

His forecast followed a series of major layoffs at three big companies — two technology manufacturers and one media conglomerate — and actions by other enterprises to cut costs by sending workers on unpaid leave.

In October, debt-ridden memory chip-maker ProMOS Technologies laid off more than 1,300 employees as part of a major restructuring plan.

Nanya Technology, a memory chip manufacturing arm of the conglomerate Formosa Plastics Group (FPG), has also announced plans to let go about 200 employees and transfer an additional 400 to related operations within FPG.

Meanwhile, Next Media Group recently laid off more than 500 employees at three of its subsidiaries — Next TV Broadcasting Ltd., Next Multi-media Entertainment Services Ltd., and Next E-Shopping Ltd. — after a multimedia sale deal.

Furthermore, Council of Labor Affairs data showed that as of Oct. 15, some 2,040 workers from 37 companies had reached agreements with their employers to take unpaid leave.

Taiwan's export orders dropped year-on-year for six consecutive months this year, from March to August, but pulled out of the slide in September, according to data from the Ministry of Economic Affairs.

Lo said the jobless rate is likely to remain close to 4.5 percent until the end of the year and that the labor market can be expected to improve from the first quarter of the 2013.

The highest monthly unemployment figure recorded so far this year was 4.4 percent in August, when it rose by 0.09 percentage points from the previous month.

Lo's views were supported by Hsin Ping-lung, an associate professor at National Taiwan University's Graduate Institute of National Development, who said there is no reason to be pessimistic on the country's unemployment rate, considering that export orders increased year-on-year in September.

Hsin forecast that any increase in the jobless rate for September will be very slight. It will be highly unusual if the rate rises to more than 4.5 percent, he added.

He suggested that the government pay more attention to structural unemployment problems than to jobless data.

The government should also be cautious about launching employment stimulus programs to avoid a crowding-out effect among job seekers, Hsin said.

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