Zhengzhou2010 wrote: headhonchoII wrote: forealz wrote:
headhonchoII wrote:It also has to be said that there are a lot of people on the breadline in Taiwan. Taiwan's incomes have fallen VERY far behind the other Asian tigers (3-6 X LESS than Korea/Japan/HK/Singapore),
a lot of institutions say that using per capita PPP is a more accurate gauge of income as it includes currency exchange rates and cost of living. the cost of living in south korea, japan, hk and Singapore are much higher there while in taiwan it's much lower. so your taiwan dollar goes much further in Taiwan. ppp income in taiwan is higher than japan and south korea. http://www.indexmundi.com/g/r.aspx?c=tw&v=67
I know there are disagreements about per capita gdp vs per capita ppp. but whatever, im not a financial person. just going by what the experts say and some say ppp is more accurate.
PPP is only useful in some circumstances. At a certain low level of income poverty is poverty. Prices of basics become king.
In addition, if you can't afford a foreign holiday or a better car or to send your kid for an overseas education you can't afford it...full stop. A 100-200 usd a month saving might be okay in Taiwan but will be next to useless overseas. You become stuck in Taiwan or developing countries.
I hear this PPP argument a lot and its mostly bullshit promoted to make people feel better in places like Taiwan at their shitty wages.
Agree that PPP can be incomplete. But am curious as to where the 3-6x figures come from. Per 2013 IMF data on Wikipedia, Taiwan is about $21K, SK is $24.3K, HK is $37.8K, JP is $38.5k, and SG is $54.8. Taiwan is low indeed, but doesn't seem 3 to 6x times lower. Am I misunderstanding?
Yes you are misunderstanding the difference between GDP per capita and average wages.
What is GDP?It represents the total dollar value of all goods and services produced over a specific time period in a given economy
That's it. So forget about using GDP per capita sometimes. It's a flawed statistic that doesn't show how wealth breaks down in a given society. It's not directly related to average people's incomes. PPP is based on GDP figures so again, it can be pretty flawed as to get the real picture as to what is going on here.
Here's an article to get some idea of the situation on the ground.http://www.forbes.com/sites/forbesasia/ ... s-go-down/It states that average earnings in the IT hardware sector are just 12,275 USD/year.
Taiwan has the highest number of millionaires per capita in Asia supposedly. That's because of low taxes, low costs, and low wages and a large number of small businesses. But it's also had stagnant wages for around 15 years now and most people have barely seen their pay budge in years. Nominal wages rose 0.9% a year from 2000 to 2010 with a sharp dip in 2008 due to the financial crisis. Meanwhile the average inflation rate was 1.1%, meaning that the average worker (not counting savings or other items) is worse off than 15 years ago!
Even worse, graduate starter pay levels dropped from 30k+ to 22k over the last few years.
That's very different than places like HK, Singapore and Korea where pay has increased fairly steadily over the last 15 years.
Go to this site to see some examples of historical salary changes over the last 15 years.http://www.tradingeconomics.com/hong-kong/wages
It also doesn't help that the NTD is consistently kept at such a low value against the USD to benefit exporters. Compare that to the Korean won which has been much stronger overall, but been allowed to float massively up and down over time as circumstances permit.http://www.xe.com/currencycharts/?from= ... W&view=10Y