Analysis: Taiwan’s Top 10% Earn Nearly 50% of Income, Hold 60% of Wealth

TaiwanPlus News

The latest World Inequality Report shows a significant wealth gap in Taiwan, with the richest 10% earning nearly half of the nation’s income and holding three-fifths of its wealth. Meanwhile, the bottom 50% of the population receives only 12% of total income. TaiwanPlus spoke with labor rights researcher Roy Ngerng about Taiwan’s wealth and income inequality.

Transcript

00:00This new report shows that Taiwan's wealthiest hold a majority of the country's wealth and

00:05almost half of its national income. What accounts for such high inequality?

00:11I think one reason for the high income inequality in Taiwan is because wages are very low.

00:16If you compare Taiwan to other countries with a similar GDP per capita, Spain, Slovenia,

00:22South Korea and Japan, their wages are much higher than Taiwan. So the economic progress,

00:29the economic fruits in Taiwan, they are not being shared with the workers.

00:34And given that the GDP per capita is the same as these other countries, that means that

00:39a lot of the income actually goes to the top earners, the executives themselves who own these

00:44businesses, as well as the profits of the company. And this allows the income in Taiwan to be very

00:51divided between the bottom and top. The other reason for the high wealth inequality in Taiwan

00:57is that when they're rich, they receive a bulk of the income in Taiwan. They can use that money

01:05to invest in housing, speculate on housing, also buy stocks and earn from the stocks.

01:10And they are able to then use this to generate wealth for themselves,

01:14which is why Taiwan's wealth inequality is very high as well.

01:18What does this inequality mean for Taiwan society in the long run?

01:22There are quite a number of research in Europe and America that has shown that high inequality

01:28can contribute to political polarisation, as well as growing social issues in the country.

01:34As a whole, there needs to be a conversation as to whether this income and wealth inequality

01:39is healthy to Taiwan if it leads to resentment at the bottom for the workers who are not able to earn

01:46enough to purchase a house and who then lead to distrust of the government. And what does this

01:50mean for Taiwan's national security going forward? There are surveys that have shown that among neutral

01:56and middle ground voters, they are more concerned about economic issues and income inequality as

02:01compared to national defence or national security. The report argues for things like progressive taxation

02:07and reforms to global finance as solution to rise in inequality. How do you think Taiwan should tackle

02:12this issue?

02:13We need to first resolve the highly imbalanced wage structure in Taiwan to ensure that it rebalances

02:23itself and is aligned to how other advanced countries actually distribute wages as compared to the

02:30economic growth in the country. We need progressive taxation at the top as well, but then if we do not

02:38address the low income in Taiwan and the low wages in Taiwan, then no matter how much taxation we are

02:43putting on the top, we are not resolving the issue at the bottom.

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