Worst unemployment to emerge around Chinese New Year, says economist

The export-oriented industries, especially those depending heavily on the U.S. and European markets will bear the brunt of the upcoming sluggish sales in the markets caused by the global financial collapse, the worst one since the Great Depression in 1930, Christina Liu, chief economic advisor of the Daiwa Institute of Research (DIR) said yesterday.

Liu said that export-oriented manufacturing enterprises are facing increasingly great pressure on laying off part of their workforce to cut operating costs and survive sharp business shrinkage.

In fact, domestic hi-tech makers of dynamic random access memory (DRAM) products, plagued by sluggish business operations, are forced to order their employees to take an unpaid leave for one week per month, tantamount to a salary cut of at least 15 percent.

Traditional manufacturing, banking and insurance enterprises are also reportedly forced to tighten up personnel spending and freeze recruitment of new personnel for replacement purpose.

Liu said that the jobless rate will surge along with the economic slowdown, and once those who have regular monthly working income become unemployed and their incomes drop to zero as a result, then the households of these bread-earners will suffer tremendously. The government should work hard to help such families tide over the “most-chilly winter” ever seen.

Statistics compiled by the Directorate General of Budget, Accounting and Statistics showed that Taiwan’s jobless rate surged to 4.27 percent in September, the highest figure of its kind for the same month in four years.

In addition, the average jobless rate for the first nine months of the year also hit a three-year high of 3.96 percent for the same period.

After seasonal adjustment, the jobless rate in September reached a four-year high of 4.12 percent for the month after surging for the third consecutive month.

The same tallies also indicated that of the 464,000 jobless people in September, as many as 145,000 became unemployed due mainly to firms downsizing or closing their operations, representing a growth of 14,000 over August, for the highest corresponding increase for the same month in five years.

Meanwhile, Professor Lin Hsiang-kai at the Department of Economics, National Taiwan University, also expressed worries about the upcoming serious unemployment wave.

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