Brain drain or people getting smart?

[headhonchoII]

But don't skilled workers and engineers get paid well?

[babab00m]

But don't skilled workers and engineers get paid well?

Nope, if working as employee, but don't tell anyone.

[milkalex]

well they get paid well in my company, however the sales team is treated as a fifth wheel. But who needs a sales team right?

[Belgian Pie]

But don't skilled workers and engineers get paid well?

Nope, if working as employee, but don't tell anyone.

In Germany? Not really, depending on what contract they've signed, many are on PT basis or temporary or even hired through a Manpower agency.

[babab00m]

In Germany? Not really, depending on what contract they've signed, many are on PT basis or temporary.

Most of those guys most probably make more than employees on a hourly basis.

[Belgian Pie]

In Germany? Not really, depending on what contract they've signed, many are on PT basis or temporary.

Most of those guys most probably make more than employees on a hourly basis.

Probably, in Germany they have the 1-Euro-jobs ... these people get support from the government.

[Taiwan Luthiers]

In Germany? Not really, depending on what contract they've signed, many are on PT basis or temporary.

Most of those guys most probably make more than employees on a hourly basis.

Probably, in Germany they have the 1-Euro-jobs ... these people get support from the government.

400 Euro mini jobs anyone? Those jobs are becoming more and more common in Germany because it seems it costs the employer significantly more just to pay one euro over 400 a month due to taxes. Not to mention in Germany strikes are common and sometimes it can cripple the economy.

The problem in Taiwan is labor laws seems to be written to please employers... if you request a maternity leave and the employer denies it, substantially reduces your pay or eliminate your job (all of which are illegal), the penalty is 10,000 - 100,000nt fine. That's chump change to them. If an employee reports their bosses for labor violation they can be sure they'll lose their job and the worst thing that ever happens to the employer is a 30,000 fine, and the employee sees none of that.

Can you see why the wage sucks here and that everyone wants to be their own boss?

[Elegua]

My take is (what I was trying to say earlier)...

The job market is hurting because MNC jobs have been downgraded because the market size and importance is less than what it used to be. For local firms it is very hard to locate your global HQ here because there are few tax treaties and the tax rules / legal environment in general sucks. Because of the limited opportunities (maybe outside of high-tech), it is really hard to find talent with the right skill sets. Most of the genuinely global talent is long gone overseas and it is hard to justify paying a lot for what is left because the local market doesn't support it and they don't have the skill-sets to work with offshore markets.

In China a manager with 5-10yrs of MNC experience with an advanced degree can easily pull 1-2m RMB per annum. I can and will pay this because the size of the market will support it. I can't say the same for Taiwan.

My former employer paid global salaries in Taiwan, but at the same time expected a global level of professionalism. I can't tell you how many times I heard something to the effect of, "There are easier ways to make a living" and the person would resign to work at a local firm for less pay and less pressure.

[headhonchoII]

Germany is sure doing well , as is Korea, and they have always had strong unions. The fact is new graduates with skills in those countries get paid a multiple of Taiwan. Unions aren't bad per se, they help bring balance and organize the workforce in some ways.

Taiwanese have a lack of cohesion which can show up in their neighborhoods, in the government, in the workplace.

The main problem however in Taiwan is the low pay. This is due to the failure of the big businesses here to move up in the value chain and diversify. Small businesses are doing what they do okay but the big guys seem to have lost their way and can't generate good profit margins or stable income.

Taiwans and Korea diverged about 10 years ago and it was mainly in the way big businesses approached their targets and also in the way they placed big bets on more sectors than just consumer electronics.

Elegua, I don't entirely agree with your analysis. China's taxes are high and income tax is also high, efficiency is not great, customs is really difficult to deal with and workers there don't always have the same work ethic of Taiwan. Chinese will move companies at a drop of a hat too and cannot be trusted in reality. They are cheap at lower levels though. The real difference is simply China's huge market size as you mentioned. China is also in it's high growth phase now.

I heard of people leaving the multinational companies for local companies sometimes. That's because some multinationals are too rigorous and just not very comfortable places to work. Basically they are not happy workplaces and some people are not motivated by top dollar. If they left constantly this is a problem of your adjustment to local culture. The company should change what it's doing.

I think you work in finance but in other areas Taiwanese cwrtainly do have the skillsets, they just need better direction, if the overseas Taiwanese could be attracted to come back to Taiwan that would be of great benefit to the economy.

Taiwan lacks preferential treaties but it's not the main problem by a long shot.

[Elegua]

Elegua, I don't entirely agree with your analysis. China's taxes are high and income tax is also high, efficiency is not great, customs is really difficult to deal with and workers there don't always have the same work ethic of Taiwan. Chinese will move companies at a drop of a hat too and cannot be trusted in reality. They are cheap at lower levels though. The real difference is simply China's huge market size as you mentioned. China is also in it's high growth phase now.

I heard of people leaving the multinational companies for local companies sometimes. That's because some multinationals are too rigorous and just not very comfortable places to work. Basically they are not happy workplaces and some people are not motivated by top dollar. If they left constantly this is a problem of your adjustment to local culture. The company should change what it's doing.

I think you work in finance but in other areas Taiwanese cwrtainly do have the skillsets, they just need better direction, if the overseas Taiwanese could be attracted to come back to Taiwan that would be of great benefit to the economy.

My

I think it would be a mistake to underestimate the important of size and growth in terms of salary levels / income generation. For example compare a business that is 800M USD growing at 20-30% a year with 20+% net margins (like a China) versus 50M growing at 8-9% with 10+% net margins (like Taiwan). 20-30% growth covers a lot of sins and inefficiency.

Is Taiwan really a much better environment? My experience with Tax and Customs officials in Taiwan has generally been worse than most other markets, China included, except Vietnam and Indonesia, (that country is un-effing believable). But let's take China as an example: In the more enlightened areas of China, they are really trying to follow the letter of the law and the new laws follow OECD guidelines (even if you can drive a large truck through the interpretation). While I have been involved in 6 month long negotiations with customs officials, discussing whether certain charges we trade related, (and dutiable), or not, they followed all of the rules. On the other hand, in civilized Taipei, I have been delivered more unfair and arbitrary tax decisions than anywhere else with no explanation at all. The tax rates are not necessarily higher in China if you can get access to the High Tech or Go West initiatives. No business I've been involved with in China has paid more than 15% in corporate income tax. Sometimes it's been lower than that. In Taiwan the tax rates have been consistently above 25% due to disallowed expenses. While borrowing costs in Taiwan are cheap, the vague rules on withholding and lack of tax agreements with other jurisdictions makes it expensive to repatriate or pay dividends.

In terms of regulation: Taiwan they have tried to follow the Japan model of having independent and regulations there are not aligned with any other markets. People will put with that crap if you have a high margin, high growth, market, but not when you only grow 5% with some of the lowest price levels in the world. Many times there was just no point in bringing a new product to the Taiwan market. Too much of a hassle for too little profit.

Individual income tax rates are not low by any means, unless you consider 30-40% low. It is not too hard to hit the top rate and global income is taxed if you, "earned", it in Taiwan whereas few, if any, overseas expenses or taxes paid are recognized as deductions.

My former employer had a good work environment, invested heavily in employees and generally had a low turnover rate (10%>). I made that comment because Taiwan is one of the few markets where I saw this phenomenon. Other markets are either used to this kind of environment (Singapore, HKG) or too hungry (China). Now the business has been downgraded and reports to Korea (bleh!).

What about talent, then? 5-10 years ago, Taiwan had a huge advantage in the quality of its workers. But I would say not anymore. At the top end it is hard to find global talent. Now try to get them to move to Taiwan (see income tax). At the bottom end it is hard to find people that are productive enough.

I don't mean to get down on Taiwan. You can probably tell from my other posts that I like it a lot. I'm frustrated that Taiwan pissed away a real opportunity to be a real regional and global player in the mid-90's through lack of investment, lack of reform and no follow through on initiatives like APROC. It could have been very different. I'm frustrated that as I look at things, there is not much left to do in Taiwan. What I see now is too little too late.

There is no place for the manufacturing. It's too costly. No place for R&D. The high end is not as good as Germany/US/Japan and the low end is more expensive than China/Vietnam. There is no global talent for a global HQ. There is no point in listing on the TAIEX since it's all sentiment and local investors and never goes anywhere. So what's left?