Where is my money? – A salary crisis of majority class in Taiwan

Where is my money? – A salary crisis of majority class in Taiwan
- Blog by Steve Hwang

I'm sure you've all heard increasing concern on salary crisis of working class in Taiwan. There were lots of bad news and alarming sign—and leaders, government, corporations and individuals all contributed to this crisis.

I'd like to discuss how the situation of salary and the impact to majority class who makes up 90% of population in Taiwan and solution of how to improve it

Let me bring you back to summer of1985 when I finished my two-year mandatory military service. ITRI (Industrial Technology Research Institute), China Steel and few other companies offered me for a job interview and the starting salary for Bachelor degree was NT 20-25K/per month. I declined the interview and continued Master degree study in Materials Engineering Institutes, Taiwan University. Two years later in 1987, after I completed M.S. study, I was offered a job to Chins Steel, Chung-San Research Center, ITRI with a starting salary of 25-30K /per month. My thinking on salary of working in Taiwan that was logical and supported by own experience should be 20-25k for B.S. degree, 25-30K for M.S. degree, 30-35K for Ph.d. degree, and expected average annual increase rate 4-5%.

After spent 3 years in University of Utah of Ph.d. study and graduated with a doctoral degree in Metallurgical Engineering, I was very fortunate to receive a job offer with a starting salary of US $ 45K /per year which is equated to NT120K/per month during a global economic recession in the winter of 1990. Later, I’d learned that the starting salary of a new Ph.d. graduate in Silicon Valley was US$ 45-55K. After 20 years passed, in 2010, the starting salary for a new Ph.d. in Silicon Valley has been more than doubled and increased to US $ 100-120K/per year (NT$ 300K/per month). That is annual compound salary growth rate of 4-5% over last 20 years.

In October of 1997, I’d published a book with 三民書局. During this book publication and launch processes, I’d privilege to work, know and make friends with two young, intelligent and wonderful people. Cathy Chang, a graduate with B.S. degree from an prestigious national university, who was my editor, helped edit the script, arrange the print and book launch event. Neil Lin, a graduate with M.S. degree from another prestigious national university, who was a journalist with Business Weekly, wrote an article on how I applied the training from rugby sport in Cheng-Kung University to becoming a top management at Seagate Technology and of managing a global, diverse organization.

I was totally surprised to know that their salaries were in the range of NT$25-35K/per month. This salary ranges for new graduates who have spent years studying hard for advanced degrees, are just pitiful and have not improved for past 20 years. Furthermore, I’ve learned that overall salary ranges for new graduates, seasoned professionals, and low or high skilled people basically remain the same as before. However, there are few exceptions earning a big paycheck including cooperate executives, banker, Investor, or some high rank employees, roughly 10% of total population who enjoy all beneficial from economic growth, are compensated by hefty stock options, bonus, salary in order to match the competitive compensation package from other global corporations in Taiwan.

While the costs of housing, education, transportation, entertainment, food and others in 2007 are all more than double the price as compared to 1987. This is an alarming sign and needs immediate attention for solution – No country can successful build on the foundation when, majority class, 90% of people, are living a life from pay check to next pay check and struggling to maintain a comfortable living standard, while a small % of population are living in a extravagant, Hollywood movie star life style.

How can we fix this salary crisis in Taiwan?

Here are my suggestions:


Minimum hourly wage:

Government should pass a law of “ minimum hourly wage’ that is the lowest hourly wage that employers may pay to workers. Through the minmum hourly wage, it increases the standard of living of workers, reduces poverty and hardship.
The minimum wage has a strong social consideration, rooted in concern about providing sufficient income for low skilled members of the work force. Minimum wage structure through the law or policy can achieve a prefereable income structure and mitigate the impact of social injusted “M” ( 10% rich and 90% poor population) income structure.
Case in point: USA has federal minumum wage law to ensure a minumum hourly wage paid to workers and employees. In order to ajusted with inflation of living cost , the averaged minumium hourly wage has increased from US$ 3.35 in 1984 to US$ 5.85 in 1997.
I believe that the minmum hourly wage should be at NT $ 130-150/per year, roughly same minumum wage in USA in 1984..


Competitively salary and wage:

Government should enforce a policy for comparable salary and wage as compared to competitive nations. Taiwan should adopt a policy to define an average salary for different skill set of workers and enforces corporations and government to comply it. The salary structure is derived from the survey of average salary from Hong-Kong, Korea, and Singapore for comparable job function and skill set.

For example, the average of salary for a skill set employee in computing industry who has a M.S. degree with 10-15 years job experience is US $ 61K/per year (NT$ 150K/per month) from the average salary of competitive countries. The corporations in Taiwan needs to pay same skill set employees with salary scale from low end, -10%, US $55K ( NT$ 135K/per month) to high end, +10%, US$ 67K ( NT$ 165K/per month).

Case in point: At Seagate Technology, we’ve a salary structue based on survey result of average salary from top 5-10 coporations with similar size, same geographic location in IT industry, companies like Intel, CISCO, Applied Materials, HP, Dell….etc.

This salay sruture provides a guide line to annula focal review and salary adjustment. In my 16 years with Seagate Technoloyg, I ‘ve seen that typical annual salary adjustment is 2-6 % and 5-8% for employees who are promoted to next grade level with increading skill set, role and responsibility. Roughly, 10-15% of total employee will receive a promotion during annual focal review.

Competitive salary structure means that employees in Taiwan have salaries similar to companies with jobs in other competitive countries. This policy will provide an annual salary rate according to global economic growth; rather it is fully controlled by the executives and investors of corporations. Government and corporations need to aware that qualified people will look for and move to other countries if they can’t negotiate and receive a competitive pay.


Accelerate economic growth and create wealth for majority class:

A government-lead policy and law are necessary to prevent runaway salary gap from rich, to poor. However, the redistribution of money equity through the use of government function could cause a negative impact on entrepreneur spirit, new business initiative and foreign investment.

The Holy Grail to solve the salary crisis is wealth creation. One area Taiwan needs to improve quickly is economic growth. Although, economy in exports is still near the top as compared to others, Taiwan needs to become best in class on domestic economy, exports, tourism and all categories of economy. Only when Taiwan can return to healthy economic growth and to create abundant wealth, along with new policy of minimum wage, competitive salary, tax on stock option and high tax bracket for rich. If everyone in Taiwan does this all together, I am fully confident that Taiwan people can solve salary issue and return to a fair, friendly and happy society.


You’ve read my suggestions to this urgent issue. Please give your comments and pass on this blog to other people.

Thank you