Brain Drain Detrimental to Taiwan's Future
China Times Editorial (Taipei, Taiwan, ROC)
January 30 2015
Executive Summary: Market sentiment has improved. The job market has followed suit. Quitting one's job is increasingly commonplace, and viewed positively by the public. But Mainland China, Hong Kong, and Singapore are all recruiting young people from Taiwan. Many young people, lured by higher salaries, have moved overseas. This brain drain is a major problem. It is unfavorable to Taiwan's future. The government must deal with it wisely.
Full Text Below:
Market sentiment has improved. The job market has followed suit. Quitting one's job is increasingly commonplace, and viewed positively by the public. But Mainland China, Hong Kong, and Singapore are all recruiting young people from Taiwan. Many young people, lured by higher salaries, have moved overseas. This brain drain is a major problem. It is unfavorable to Taiwan's future. The government must deal with it wisely.
Last year, the economy began to recover. Employment opportunities increased. The unemployment rate gradually declined. The December unemployment rate was 3.79%. This was 0.29 percentage points lower than the same period last year. It was the lowest in nearly 14 years. Last year, 457,000 people were unemployed. This year that number fell by 21,000. They were unemployed for an average of 25.9 weeks. That is 0.3 weeks shorter than last year. The job market was the best it has been in years. Payroll Statistics show that by November last year, the average salary (including overtime, bonuses) was 47,377 NT, a 3.89% increase. This was the highest salary level for the calendar year. But prices rose 1.26% over the same period. As a result, the actual level remains where it was 15 years ago.
The public has begun to respond. According to a Yes123 employment agency survey, the company and staff were optimistic about the first quarter of this year. The Lunar New Year is approaching. As many as 68% of all office workers are ready to quit this season. The 1111 employment agency found that over 94% of all workers plan to change jobs after the New Year. Clearly many people are changing jobs. This is an international phenomenon. On January 11, CNN Money issued a report on the situation in the United States. The career website Glassdoor.com gave 900 respondents a questionnaire. As many as 35% said that if employers did not give them a raise, they would resign and seek employment elsewhere.
This is the era of self-help. Taking the initiative to find a better job is right and proper. Quitting, even going abroad to earn money, should be encouraged. We should not cling to the outmoded concept of lifetime employment, and require employees to remain in one place. When companies cannot provide employees with better remuneration, bosses should ask themselves why they cannot provide employees with higher incomes. If employees leave and find other jobs, they should be congratulated, not condemned. Bosses should have a sense of corporate responsibility, or noblesse oblige. They should not pocket all the profits. They should give employees better dividends. Greater incentives enable companies to reach greater heights.
Alas, in-depth studies have revealed a phenomenon unique to Taiwan. Many career changers boldly abandon their field of past expertise. They make a blind leap into entirely different industries and jobs. This phenomenon is expected to manifest itself after the New Years holiday. According to 1111 employment agency statistics, 26.7% of all career changer took just such a leap. As a result, salaries declined nearly 1% from the previous quarter. Clearly job seekers are desperate, and willing to leave a familiar environment. They would rather seek change, and sacrifice their current salaries, in pursuit of greater future rewards.
Young people seeking adventure or life experiences should be encouraged. But more and more are leaving home for employment abroad. This is detrimental to the nation's prosperity. Many of them are high-tech and management talent. Data shows that up to 61.1% of those who relocated were professionals. The massive outflow of high-end manpower from Taiwan is particularly serious. Meanwhile, foreign workers on Taiwan are not high-end talent. As a result, Taiwan has become a net exporter of high-end labor. Department of Labor statistics indicate that over the past 10 years, 27,000 people with high-end talent have moved abroad.
Oxford Economics, a British economic research institute, and several multinational corporations have just released their “Global Talent 2021” resport. They estimate that by 2021, Taiwan's brain drain, in combination with its failure to attract foreign talent, will make it the most talent deficient region in the world. This is a huge warning sign for Taiwan. Advanced Western countries and the three other Asian dragons, have inflows of talent as well as outflows. They, unlike Taiwan, do not suffer a serious imbalance.
We lag far behind in the international bidding wars. But why? Because after-tax salaries on Taiwan are too low. As the saying goes, “The temple is too small for the Buddha.” People with ability prefer to be in the international market. So they vote with their feet, and leave Taiwan. Low-incomes and regulatory restrictions prevent the introduction of foreign high-level white-collar workers.
What is the answer to this problem? First of all, the government must abandon the notion of "control" and adopt a spirit of "growth”. This would encourage business executives. Government control is all about avoiding mistakes. But this limits the possibility of progress. Only the spirit of growth can retain talent. One of the key factors is the maximum marginal income tax rate of 40%, which may be raised to 45%. This is highly detrimental to retaining or attracting high-end talent.
The "Industrial Innovation Articles" have yet to be passed. It should be fast tracked. It includes research and development investment tax credits, the formalization of technology shares taxation, five major tax free employee incentives, and three changes to the tax laws. The amendment may encourage continued investment in innovation and research, promote innovation, strengthen domestic enterprises, and retain talent. Legislators have questioned the enterprise tax concessions. They say that they may help enterprises to reduce costs and increase after tax profits. But in the long-term they may be detrimental to international competitiveness and corporate responsibility. Now is a time of extraordinary economic turbulence. Extraordinary measures are required to promote economic and social progress.
英國經濟研究機構牛津經濟公司和多家跨國企業最新的集體研究《全球天資 2021》（Global Talent 2021）更預估，台灣到2021年時，因人才外流，加上吸引不到國際人才，恐將成為全球最缺乏人才國家。這對台灣未來的發展是很大的警訊。西方先進國家及亞洲其他三小龍，人才有流出也有流入，不像台灣如此嚴重的失衡。