Approaching Labor Crisis in Taiwan
In the heart of East Asia, Taiwan is grappling with a significant demographic shift. The latest government data reveals a 19th consecutive month of population decline, with the over-15 population standing at 20.244 million last year.
One of the key factors contributing to this trend is the continued slide in birth rates. The proportion of women between the ages of 15 and 24 who do not want children is alarmingly high, with over 45 percent expressing such sentiments according to a Ministry of Health and Welfare survey.
This contrasts starkly with the participation of women in the workforce. Women in Taiwan participate much less than their counterparts in South Korea and Japan as part-time workers. The labor force participation rate for individuals in the age 50-54 cohort was 78.40 percent last year, while for those aged 55-59, it was 62.22 percent.
The issue of women's workforce participation has been a focus for local NGOs such as the Childcare Policy Alliance, which advocates for changes to address the factors preventing more women from working in Taiwan.
The Alliance, along with others, has also called on the government to encourage more men to take parental leave. This could help alleviate some of the pressures on women, allowing them to return to the workforce more easily.
However, the incremental growth in the minimum wage has not significantly helped many workers in Taiwan. Over two million workers between the ages of 45 and 64 are out of the workforce, with 95 percent of them having no intention of returning.
The cost of children is another factor influencing Taiwan's plummeting birth rates. Not just the initial costs, but the lifetime cost of raising children must be defrayed to address this issue. The cost of children is rising both absolutely and relative to incomes, contributing to global birth rates plummeting.
As Taiwan faces a looming workforce crisis, with estimates suggesting it will lose 6.67 million workers in two waves of retirement over the next 15 years, the government must consider innovative solutions. A wise government might consider paying a large lump sum into the retirement accounts of women for every second or more child, with the total budget for this initiative being approximately US$9 billion in a US$750 billion economy.
The column "Notes from Central Taiwan" is written by long-term resident Michael Turton, who provides incisive commentary informed by three decades of living and writing about Taiwan. Turton's views, as expressed in this column, are his own.
In conclusion, Taiwan's demographic challenges are complex and multifaceted, requiring thoughtful and innovative solutions. The continued slide in birth rates and the rising unwillingness of young women to have children is evidence that current subsidies for children do not work effectively. It is crucial for the government to address these issues to secure Taiwan's future.
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