Taiwan's recent economic growth, projected to exceed 10%, has created a fascinating dichotomy within the country. While research institutions paint a rosy picture, the reality on the ground tells a different story. The growth is heavily concentrated in the semiconductor industry, leaving other sectors and the majority of Taiwanese workers behind. This K-shaped economic structure has led to a widening wealth gap and a sense of detachment from the booming economy for many ordinary citizens.
One of the most striking aspects is the illusion of average income. Despite an increase in the average wage, a staggering 70% of wage earners fall below this average. This is largely driven by the high-paying semiconductor sector, which employs a relatively small portion of the population. The average wage, therefore, becomes a misleading indicator of the overall economic well-being.
The wealth gap further exacerbates the issue. The wealthiest 20% of households have an average net worth that is 66.9 times that of the poorest 20%. Housing, a key factor in this disparity, has become increasingly unaffordable. For young people, buying a home through diligent work and savings alone is nearly impossible, leading to a reliance on inheritance.
The impact of this economic polarization is felt in various ways. Those struggling with housing costs are forced to seek less desirable living arrangements, such as rooftop extensions or shared housing. The choice becomes a trade-off between proximity to opportunities in Taipei and a decent living environment.
This concentration of growth in a few sectors also poses a risk to Taiwan's economy. While exports have increased, they are heavily reliant on electronics and ICT products. The lack of industrial diversification leaves the country vulnerable. Small and medium-sized companies, unable to compete with semiconductor firms, struggle to recruit talent, creating a downward spiral.
In my opinion, Taiwan's experience serves as a cautionary tale. It highlights the importance of ensuring that economic growth benefits a broader segment of the population. The 'average trap', as it's been called, can create a false sense of prosperity, masking the real challenges faced by many. It's a reminder that economic policies must consider the entire ecosystem and not just focus on headline growth figures.
As we reflect on Taiwan's situation, it raises important questions for other countries, including Korea, which is experiencing a similar semiconductor upcycle. How can we ensure that economic growth is inclusive and sustainable? How can we bridge the gaps between industries and create a more resilient economy? These are the deeper questions we must ask as we navigate the complexities of modern economies.
