The COVID-19 pandemic had changed the lifestyles of people in Taiwan dramatically and has led to a sharp rise of income inequality, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said Sunday, citing 2020 data.
Since COVID-19 was first confirmed to have spread to Taiwan in January last year, it has disrupted the country’s manufacturing operations, hurt consumer confidence and dealt a blow to the service industry, the DGBAS said.
While average household savings grew by a record annual 14.8 percent last year to NT$265,000 (US$9,461) since 1994, the income gap between rich and poor households widened, the DGBAS said, citing its 2020 Survey of Family Income and Expenditure.
In 2020, income inequality in Taiwan was the highest in eight years, with the top 20 percent of households earning 6.13 times the bottom 20 percent, according to the DGBAS.
Chu Tzer-ming (???), head of the DGBAS, attributed the sharp rise income inequality to the fact that disadvantaged employees have been hit harder by the economic fallout from the COVID-19 pandemic, as many of them have been asked to take unpaid leave, for example.
Meanwhile, the DGBAS survey showed that average household spending in Taiwan fell by an annual 1.7 percent in 2020 to NT$815,000 (US$29,107), registering the biggest drop on record.
Dachrahn Wu (???), director of the Research Center for Taiwan’s Economic Development at National Chengchi University, said the threat of new COVID-19 variants might take a toll on Taiwan’s job market this year, dimming the prospects of a reduction of income inequality.
The COVID-19 outbreak has ravaged Taiwan’s economy more heavily this year than in 2020, when compensatory consumption surged in the second half of the year after the government eased some its disease prevention restrictions, he said.
Taiwan’s manufacturing capacity and exports, however, have grown sharply this year, bringing benefits to shareholders and employees of companies in the manufacturing and high tech sectors, he said.
In comparison, employees in the service industry saw their earnings drop due to job loss or furloughs, as economic activity declined due to the COVID-19 outbreak, Wu said.
The government should do more to provide relief to economically and socially disadvantaged people affected by the COVID-19 outbreak, Wu said, noting that property sales were brisk in the first half of 2021 and the domestic economy will grow robustly for the whole of the year.
Source: Focus Taiwan News Channel
