Taiwan's Stagnant Wages, Simplified

Outwardly, Taiwan exudes an image of prosperity. A weekend walk around Taipei will reveal a surplus of successful small businesses, a small but well-furnished and meticulously decorated cafe on every corner, and even street vendors with queues that wrap around the block. Global headlines praise Taiwan’s booming high-tech industries, and TSMC, the world’s most important chipmaker, is from Taiwan.

But despite the seemingly booming economy and what appears to be a large amount of spendable income, the reality of working wages in Taiwan is much more sobering. Working wages for the Taiwanese, especially Taiwanese youth, have remained stagnant. How could this be, and why?

Superficially, the average wage statistics of Taiwan throughout the years have been increasing. For example, data from April of 2025 states that Taiwan’s average regular monthly wage hit NT$47,807, which is a 3.22% year-on-year increase.¹ Adjust for inflation, however, and you’ll see that the real regular wages were NT$43,727, making the year-on-year increase actually a mere 1.16% gain.² More revealing still is the median wage. In the same April of 2024, the median regular wage, known for being a more accurate statistic when looking at wages, was barely over NT$38,000 per month.³ Furthermore, a statistic collected in mid-2025 highlights a record of nearly 70% of Taiwanese employees earning below the statistical average—emphasizing how the distribution is skewed due to a few ultra-high earners.⁴

The situation is only grimmer for young people newly entering the workforce. The pay for fresh college graduates is a monthly average—again, keep in mind that averages are disproportionately high—of NT$34,000. The equivalent figure for high school graduates is NT$29,000.⁵ So, why has wage growth been so muted?

1. Corporations Prioritize Profit
   This really isn’t anything new—corporations as a whole are notorious for putting profit before appreciation for their workers. From 2012 to 2021, the labor portion of Taiwan’s GDP has declined from 45.77% to 43.07%, while corporate profits’ share has increased.⁶

*Analysts argue that Taiwanese firms tend to keep wages low as a means to preserve profit margins, which is necessary in fields such as manufacturing and technology due to global clients such as Apple demanding cost competitiveness.

2. Reliance on Contract Manufacturing
   Save for semiconductors, most Taiwanese companies serve as “foundries,” producing for foreign brands, leading to less profit per unit, which makes wage increases difficult.

3. Weak Minimum Wage Influence
   Analysts predict that the monthly minimum wage will rise from NT$28,860 to NT$29,500, a 3.2% increase, by January 2026.⁷ However, many labor groups fairly argue that this increase in the monthly minimum wage is minimal compared to the price hikes in utilities and living costs, advocating for a 4% increase.⁸

4. Sector Gaps
   Overall wage growths are dragged down by salary disparities across different sectors. For example, healthcare and social work average a monthly salary of NT$76,000, and the finance and insurance industries average NT$73,000. However, less lucrative industries such as retail and hospitality average barely above NT$31,000.⁹

5. Lack of young talent
   There are concerns that young Taiwanese talent are leaving their country to chase more lucrative career options in countries such as the US or Singapore. If true, this could create a cycle where a lack of talent leads to less economic growth, preventing wage growth, which then pushes the next wave of young talent to leave the country.

This issue of wage stagnation has an immediate impact on young workers. Taiwan has a property price-to-income ratio that is among the highest in the world, making housing affordability more of a lack of affordability. Domestic consumption, despite how it may seem, will remain weaker due to a lack of growth in disposable income. Economists even argue that, to match Taiwan’s GDP per capita, the median wage would have to fall between NT$80,000 and NT$110,000, a ridiculously high number if you consider the real median, between NT$40,000 and NT$46,000.¹⁰

Furthermore, there are also non-economic impacts that significantly impact young people. Financial insecurity caused by low wages causes delays in marriage, and even prevents many from having children—this leads to another issue Taiwan is notorious for, a low birth rate. Additionally, there are even local sayings, such as “lying flat,” which indicate a widespread sense of disillusionment, as people feel as if their hard work doesn’t translate into better pay.

Still, there is hope. The consecutive increase in real wages for over a year, along with the government continuing to inch up the minimum wage, are both hopeful signs. Furthermore, competitive sectors such as finance and healthcare are increasing their salaries as a method to attract talent.

However, the main question regarding whether Taiwan can escape this “low wage trap” relies on a deeper structural reform. Profit distribution, labor bargaining power, and industrial strategy—problems regarding these topics need to be addressed before Taiwan can escape this vicious cycle of low wages.

By: Sihyun P.

¹: https://hr.asia/taiwan/taiwans-wage-growth-beat-inflation-for-13th-stran on ight-month/
²: https://focustaiwan.tw/business/202506110024?/
³: https://focustaiwan.tw/business/202508110025
⁴: https://www.taipeitimes.com/News/taiwan/archives/2025/05/on on 03/2003836254
⁵: https://www.taipeitimes.com/News/editorials/archives/2024/08/19/2003822429
⁶: https://focustaiwan.tw/business/202509260010
⁷: https://www.taipeitimes.com/News/taiwan/archives/2025/09/22/2003844218?
⁸: https://focustaiwan.tw/business/202505290017
⁹: https://international.thenewslens.com/article/186954
¹⁰: https://international.thenewslens.com/article/186954