Taiwan’s Wages Are Lower Than Countries with Similar GDP per Capita

Taiwan’s GDP per capita is expected to exceed US$40,000 next year. Also, Taiwan’s GDP per capita and cost of living is now on par with Spain, Slovenia and Japan (left chart below). But how does Taiwan’s wages compare with them?—we explore in this article. 

We also include two sets of advanced countries with lower GDP per capita in this comparison—Czechia, Estonia and Lithuania with GDP per capita 10% lower than Taiwan’s (middle chart); and Slovakia, Poland and Croatia, which are 25% to 30% lower (right chart).

Data source: The GDP per capita data is derived by dividing the overall GDP (Taiwan, other countries) with the population (Taiwan, other countries) of respective countries. Notes: (1) The definition of advanced countries used in this article is based on the International Monetary Fund’s definition. (2) The line charts used in this article are based on constant exchange rates, in order to demonstrate the long-term trend.

Among countries with similar GDP per capita and cost of living as Taiwan (Spain, Slovenia and Japan), their monthly median wages were about NT$80,000 in 2023, however Taiwan’s median wage was much lower—at only NT$46,667, or only about 60% that of theirs (and 70% that of Slovenia’s) (left chart below).

For low-income workers, the 1st-decile wages among these economically-similar countries were about NT$40,000 to NT$60,000, but it was a much lower NT$26,333 in Taiwan, or only about 45% to 60% that of theirs (middle chart). 

Even among high-income earners in Taiwan, they are also earning less than their counterparts—the 9th-decile wages in these economically-similar countries were about NT$125,000 to NT$180,000 a month, but only NT$106,583 in Taiwan. 

Data source: The median wage data of other countries is derived by dividing the minimum wage with the minimum wage-to-median wage ratio of respective countries. The 1st and 9th-decile wages are derived by comparing the wage decile ratios with the median wage. Taiwan’s data is obtained from Taiwan’s National Statistics.

Compared over the longer-term, wages in these economically-similar countries have been rising much faster, but Taiwan’s wages (in the red lines below) have grown much more slowly. 

Note: Taiwan’s median wage data for full-time work is available for only a shorter period, so the data for all workers (including part-time workers) is also included in the charts in this article to illustrate the longer-term trend.

Taiwan’s wages have been growing so slowly that its median-wage earners are today actually only earning the minimum wage, when benchmarked to other economically-similar countries; and Taiwan’s high-income earners at the 8th-decile are actually only earning the median wage. 

Taiwan’s Wages Are Even Lower Than Countries With GDP per Capita 10% to 30% Lower than Taiwan

Even compared with advanced countries with lower GDP per capita than Taiwan—at 10% lower (Czechia, Estonia and Lithuania)—Taiwan’s 1st-decile and median wages are also lower. Taiwan’s wages are only 80% of theirs.

Over the last few years, wages in these three countries have also all grown rapidly to catch up and overtake Taiwan.

In fact, Taiwan’s wages are only at the level of advanced countries with even lower GDP per capita—that of Slovakia, Poland and Croatia, with 25% to 30% lower GDP per capita—where wages have also been growing rapidly.

Taiwan’s Wages Are Still Lower Than Economically-Similar Countries Even After Tax

Even after accounting for tax and social security, Taiwan’s wages are still much lower than advanced countries with similar GDP per capita—Taiwan’s median wage is only 70% that of Spain, South Korea and Japan, and its 1st-decile wage is only at 50% to 60% of theirs. 

Note that Taiwan has a similar cost of living as these countries, but its wages are much lower. Also, while South Korea’s cost of living is about 20% higher than Taiwan, its wages are even 50% higher or double Taiwan’s. This means that Taiwan’s workers have much lower purchasing power than workers in these other countries.

Note: The income tax and social security contribution rate for other countries for the 1st-decile wages are calculated based on the rates for wages at 67% of average wage, and the rate for median wage is calculated based on average wage (based on available data from the Organization for Economic Co-operation and Development), so the rates used for calculation are higher than the actual rates, meaning that the net 1st-decile and median wages in this article are under-estimated, and are likely higher. For Taiwan, the annual tax and social security contribution rates are used.

After deducting tax and social security, Taiwan’s wages are as low as countries with GDP per capita 10% lower than Taiwan (Czechia, Estonia and Lithuania). 

In other words, Taiwan’s GDP per capita may be on par with Spain, Slovenia, South Korea and Japan, but its wages are not par—and even as low as only half that of theirs. Instead, Taiwan’s wages are much lower, and only at the level of advanced countries with GDP per capita 10% to 30% lower than Taiwan. 

In short, Taiwan’s workers are severely underpaid for the country’s stage of economic development. 

Taiwan’s Wages Are Severely Undervalued

For readers, it may be clearer when comparing wages by occupation. 

For example, for accommodation and food service workers, Taiwan’s average wage was only NT$41,927 a month in 2023, but it was close to NT$53,000 in Slovenia—or 26% more than Taiwanese, while Spaniards and South Koreans earned close to 20% more. Health and social workers in Slovenia and Spain also earned close to 20% more than Taiwanese. 

Even in Taiwan’s prized manufacturing sector, wages are low—Taiwan’s workers only earned only NT$68,549 a month, as compared to NT$85,000 to NT$90,000 in Japan and Spain respectively (30% higher), and over NT$110,000 in South Korea (60% higher). 

For transportation and storage workers, those in South Korea earned 60% more than Taiwanese. South Korean workers also earned 80% more than Taiwanese workers in the electricity and gas supply sector. 

Among these occupations, Taiwan’s workers earned as low as workers in Czechia, Estonia and Lithuania—countries with GDP per capita 10% lower than Taiwan.

Data source: Taiwan, Spain, Slovenia, South Korea, Japan, Czechia, Estonia, Lithuania.

Note: The data for Spain and the Czech Republic is based on full-time work. Taiwan’s data from 2018 to 2024 is based on full-time work, based on data availability. The data for the other countries may be underestimated, if they include non-full-time workers.

For other occupations, it is worse—Taiwan’s wages are even lower than countries with GDP per capita 10% lower (charts below).

Taiwan’s workers earned only two-thirds that of Lithuanians and South Koreans in information and communication, only 55% that of South Koreans in wholesale and retail trade, only half that of the Japanese in construction, and only 45% that of Spaniards in water supply and remediation activities.

In the arts and entertainment, Taiwan’s workers only earned 60% that of Slovenians and South Koreans; and in professional, scientific and technical activities, Taiwanese earned only half that of South Koreans and 60% of the Japanese. The education sector performs the worst, where Taiwan’s workers only earned 40% that of Spaniards, Japanese and South Koreans. 

The arts are where creativity and new ideas thrive, scientific activities are where important research is conducted to uncover new innovation, and the education sector grooms the next generation of talent; but in these three sectors, Taiwan’s workers are paid much lesser than other countries at economically-similar levels—which means Taiwan is severely undervaluing these occupations, and hurting Taiwan where it needs talent the most.

Looking over the longer-term, the charts below show how suppressed Taiwan’s wages have been in the last two to three decades in many industries. Especially for charts in the last row, wages in electricity and gas supply, and in water supply and remediation activities, have in fact not grown at all since 2000.

In education, wages have grown rapidly in other countries, but it barely grew in Taiwan in the last six years—Taiwan’s severe undervaluing of education workers is staggering here.

Of note, while Taiwan has a similar cost of living as these countries, its housing prices are much higher—at 1.5 to 2 times that of countries with similar GDP per capita; and compared with countries where Taiwan’s GDP per capita is 10% to 20% higher, its housing prices are a whopping 100% to 250% higher. This means that not only are Taiwan’s wages subpar when comparing consumer prices, Taiwan’s purchasing powers are even far lower when factoring in housing prices. 

Taiwan’s Wages Are Too Low, Profits Are Too High

Taiwan’s wages are one of the lowest, if not the lowest, among economically-similar countries, but Taiwan’s profits (or operating surpluses) are the highest compared to them. Its profits are much higher than Czechia, Estonia and Lithuania, but its wages are even lower than theirs in most occupations.

Data source: Profits / operating surplus (Taiwan, other countries)

As such, Taiwan has been suppressing its wages, in order to let businesses profit excessively—Taiwan’s minimum wage is today the lowest among economically-similar countries (left chart below), but its profits are the highest (right chart below).

Taiwan’s Wages Have Fallen Behind Because Minimum Wage is Growing Too Slowly

Indeed, Taiwan’s minimum wage growth has been much slower than other economically-similar countries, where their wages have been growing much more rapidly. 

While President Tsai Ing-wen’s government raised the minimum wage faster than her predecessors, it hasn’t been fast enough to recover from past wage stagnation under previous governments. 

Data source: Minimum wage (Taiwan, other countries (1, 2))

In fact, in the last eight years, Taiwan’s minimum wage has only grown by about NT$7,500, leading to its median wage to grow only within that range. 

However, in Slovenia, South Korea and Spain, their minimum wages have grown by about NT$16,000 to NT$20,000 over the same period, leading to their median wages growing by a similar level, or more—or double to triple that of Taiwan. 

Taiwan’s wages are therefore growing slowly because its minimum wage is growing too slowly.

Eight years ago in 2017, the minimum wages of Slovenia, South Korea and Spain were at where Taiwan is today. If Taiwan were to follow their growth pathways, and its minimum wage were to grow by NT$2,000 to NT$2,500 a year to reach NT$45,000 in eight years, its median wage could reach NT$70,000 to NT$90,000 by then—as have these countries.

However, Taiwan’s minimum wage has only grown by an average of NT$950 annually in the last eight years. Below, look at how flat Taiwan’s wage growth is compared to the other countries.

But based on their current growth, the minimum wages of Slovenia, South Korea and Spain are likely to grow to NT$60,000 in 8 years, which means that for Taiwan to reach parity with them and with its GDP, its minimum wage would also need to grow to NT$60,000 by then. 

This means that Taiwan would need to follow the trajectories of Poland and Lithuania, which have been growing their minimum wages by an average of NT$3,000 a year in the last 8 years—these two countries have grown their minimum wages from being only 70% that of Taiwan to being 30% higher than Taiwan today.

Taiwan’s Wages and GDP Are Severely Imbalanced 

As I wrote previously, among advanced countries where growth has been more balanced, the annual average wages of these countries tend to be similar to their GDP per capita (left chart below). Taiwan’s GDP per capita in 2024 was around NT$90,000 on a monthly basis, so its monthly average wage should have been at this level, however Taiwan’s average wage was only about NT$64,687.

Among more balanced countries, their minimum wages should be about half that of average wage or more precisely, the GDP per capita (right chart). Thus, Taiwan’s monthly minimum wage should be about NT$45,000 in 2023, but its minimum wage was only NT$27,470.

Taiwan’s wages and profits vis-à-vis its GDP per capita are therefore highly imbalanced and unequal. 

Data source: Average wage (Taiwan, other countries). Note: The trendline is drawn based on the positions where the countries should be at if their wages are fully in balance with their GDP per capita.

Specifically, by the 1990s, Taiwan’s GDP per capita, and minimum and average wages have caught up with Spain. Today, Taiwan’s GDP per capita is also on par with Spain, and its wages should have continued to be on par with Spain. 

However, from 1997, Taiwan stopped growing its minimum wage for about a decade and thereafter, only grew it slowly, leading to Taiwan’s wages being only 60% of Spain’s today—even though both countries also have a similar cost of living. 

As we saw above, the problem is that Taiwan’s profits are too high. But Taiwan’s total wages in the economy (or compensation of workers) are actually on par with Spain too—what this suggests is that the top executives of Taiwan’s businesses are suppressing the wages of workers but paying themselves very, very handsomely, thus pulling up total wages to be similar to Spain’s.

This also explains why Taiwan’s housing prices have been over-speculated upwards by Taiwan’s wealthy—because they have been paying themselves extravagantly, and have excessive funds to throw around. 

Data source: Total wages / compensation of workers (Taiwan, other countries)

As such, Taiwan’s government and businesses have been suppressing the wages of workers, leading to business profits and executive salaries growing excessively faster relative to worker wages, and Taiwan’s economy becoming highly unbalanced.

Taiwan likes to use rhetoric like calling workers “hardworking” or even “servile”,  in order to compel them to accept low wages to do their work, but in actuality, Taiwan’s workers are being severely exploited by Taiwan’s businesses and bosses.

Taiwan’s GDP per capita has reached similar levels as Spain, Slovenia, South Korea and Japan, so by right, its minimum and median wages should be at similar levels as theirs too, but its wages have instead been far suppressed.

Based on Taiwan’s GDP per capita, its average wage should be around NT$90,000 and its minimum wage about NT$45,000—or where Spain, Slovenia and South Korea are at today.

Meaning, instead of NT$30,000, Taiwan’s low-income workers should be demanding to be paid NT$45,000. Instead of NT$65,000, Taiwan’s middle-income workers should be demanding to be paid NT$90,000.

Thus, Taiwan’s government needs to urgently implement a plan to raise wages similar as these countries have done in the last eight years, in order to rebalance Taiwan’s economy. 

Otherwise, all the talk about Taiwan’s GDP per capita exceeding US$40,000 next year is meaningless, when the economic growth hasn’t been fairly returned to workers.  

In short, Taiwan needs to be genuine about its practice of human rights, and align its labor rights with its advocacy of democracy.

(Featured photo by Jimmy Liao on Pexels)