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Introduction
• Why are so many undergraduate students studying abroad, especially in Hong Kong?
• What happened to the labor market in Taiwan?
• How is the unemployment situation like?
Graduated=Unemployed?
• 畢業即失業
• A university graduated student spend an average of 7 months to get a job
• With a starting salary of 24K (about 6000HKD)
Definition & Labor Market Situation
Employed (10m)
Unemployed (0.5m)
Not in labor force
Adult Population
(above 15)
*US BLS=above 16
Labor Force
1) Not employed2) Available for work3) Tried to find
employment
Under educationHousekeeperElderly
Definition & Labor Market Situation
• Unemployment Rate
= Number of unemployed / Labor force *100%
– Taiwan = 4.18%
• Labor-force Participation Rate
= Labor force / Adult population *100%
– Taiwan = 58.45%
Different Reasons of Unemployment
Unsatisfied34%
New Job Seekers
22%
Laid Off and Business
Shut down28%
Part-time Job Over10%
Others6%
Frictional UnemploymentResults because it takestime for workers to searchfor the jobs that best suittheir tastes and skills
Structural UnemploymentWhen number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one→ wages are set above the level that brings supply and demand into equilibrium
Natural Rate of Unemployment
Video
• Undergraduates and master degree holders unable to find suitable jobs
• 470 people applying for 13 vacancies of janitor, including 5 master degrees
• http://www.youtube.com/watch?v=wXUBanlXbFE
Over Education
• Labor at high technical level
• Quantity demanded < Quantity supplied– There is too much highly educated labor
• Labor with high diploma doing basic-level job is also defined as a kind of unemployment in Taiwan
Number of Graduate School
Master Doctor
2000 about 1340 14,000 (hundreds)
2010 about 3300 54,000 Over 3000
• Labor at high wages level
• Quantity demanded < Quantity supplied
– Higher education lead to higher wages
surplus Labor Supplied
Labor Demanded
Price= Wages
Quantity
Unemployment Rate in Different Level of Education
Elementary and below
Junior High Senior High Vocational school
Junior College
University and above
2009 4.35 6.83 6.07 6.23 4.96 5.98
2010 3.27 5.84 5.43 5.63 4.33 5.62
2011 2.52 4.44 4.75 4.63 3.40 5.18
2012 2.32 4.27 4.45 4.15 3.18 5.37
Highly educated labor’s unemployment rising again
Industry Outflow and Foreign Worker
• MIT (Made in Taiwan) → Made in China
• Cheap labor wages in Mainland China and South-east Asia
• Industry outflow
– Mainly those highly labor intensive
No. 1= Manufacturing Industry
• Critical Mass
– When one company move overseas, the upstream and downstream firms may move together, and eventually the whole production line moves
• Mainland China’s Policy
– Tax benefit
– Banks providing low interest
– Land licenses
• Because of lower wages with bigger market, Taiwan businessmen have increased investment in mainland China since the 70’s, resulting in Taiwan local labor market demand’s reduction.
.
Different Reasons of Unemployment
Unsatisfied34%
New Job Seekers
22%
Laid Off and Business
Shut down28%
Part-time Job Over10%
Others6%Cyclical unemployment
also known as deficient-demand unemployment, occurs when there is not enough aggregate demand in the economy to provide jobs for everyone who wants to work. Demand for most goods and services falls, less production is needed and consequently fewer workers are needed→ affect by overall economy
Over Rely on International Trades
• Global Economic crisis– Taiwan economy relies mainly on international
trades, as a consequence, when the global economic crisis arose, the overall demand of goods decrease and therefore affect the export industries in Taiwan. When these firms made less profit, they gave non-salary rests or even laid off employees
• Taiwan function as OEM (original equipment manufacturer) supplier 代工
Unemployment Rate in the World
5.855.21
4.39 4.24
0
2
4
6
8
10
12
2009 2010 2011 2012
Taiwan
Hong Kong
Japan
South Korea
US
UK
Germany
Influence on Individual
Lack of income
Life quality ↓
PressureMental &
physical health ↓Family
harmony ↓
Influence on Society
• Society unstable (ex. protests)
• Crime in property
• Waste of social resources
Solutions ─ Government Policies
• Allowance for employment 雇用獎助津貼
– companies which employ certain unemployed people (having physical troubles or has been unemployed for more than 3 months) would get NT$8,000~12,000 per employee per month from government
• Employment Insurance 就業保險法
– The involuntary turnovered employees would get 60% of the insured average monthly salary (for at most 6 months), bearing only 20% of the insurance expenses (70% by the company and 10% by the government)
Solutions ─ Government Service
• Job Fair
• Career Service Center
• Occupational Training
• Website政府勞工委員會就業補給站
– http://www.cla.gov.tw/cgi-bin/siteMaker/SM_theme?page=499cd151
Solutions ─ Unemployed Individual
• do career plan ahead
• learn practical knowledge and skills
• refer to the relevant unemployment situation when making important choices