An excellent breakdown by the Taiwan Institute of Economic Research, which I was told produces better numbers than the politically-charged DGBAS.
The opening line is, “Why the fruits of economic growth aren’t felt by everyone.”
Taiwan’s economy depends too much on semiconductors (半導體), which stands for (半個島考它養身體 harharhar). Manufacturing semiconductors is capital intensive, so money goes into machines and not salaries. I’ve heard that explanation mentioned here before. That’s why semiconductors don’t lift all boats.
Hmm…if you have more machines then labor productivity would go up as well, so wages should go up too (when productivity goes up wages should be going up, as I’ve demonstrated here). But I guess it doesn’t go as much as if most of the gains go into salaries, as is with services.
Furthermore, he said that TSMC doesn’t hire that many people (I thought they’ve got huge recruitment drives where they’re hiring thousands of people. They’re even hiring from outside the Big 4).
He said that it benefits only the 園區 (industrial park, i.e. science park). That’s why I have high hopes for Tainan.