Unemployment Rate Blues

There's been a lot of coverage lately about Taiwan's highest unemployment rate ever: 5.9%

forbes

bloomberg

Taiwanese seem worried but, honestly, I can't help but laugh. Western countries' unemployment rates usually range in the 7 to 12% range in normal situations and, heck, we're in a global recession at the moment of huge proportions. By comparison, Taiwanese screaming about unemployment rates seem like Chicken Little (The sky is falling!).

Just how do unemployment statistics stack up across countries? Well there is a lot of dispute since some governments are less open about reporting unemployment statistics or have vastly different ways of calculating them (some countries do not include incarcerated prisoners in their statistics, a fact, that as some have pointed out, makes unemployment statistics in countries like the US artificially lower [feel free to correct me if I'm wrong about this]).

Wikipedia to the rescue! Found some good data to compare which needs to be taken with a grain of salt. However, the overall picture painted is clear.

Taiwan 5.82%
Japan 5.2%
China 9%
United States 9.5%
UK 7.6%
Germany 8.3%
Spain 18.7%
Russia 9.9%
Brazil 8.8%
Iraq 18.00%; 28% among youth; 83% among women

Compare these to:
Zimbabwe 90%
Andorra 0%

wiki

All this unemployment talk has made me think about ways that citizens of each country react to unemployment news. I look at a country like Spain in particular which has, in my opinion, a fairly high unemployment rate for the kind of country it is. No one is rioting in the streets there about unemployment. However, if it were Taiwan, people would be thinking it is the end of the world. So how does a country like Spain cope?

I think it has a lot to do with the capacity to absorb unemployed back home to the family and this is also a point in Taiwan's favor as well. Usually, the goal of western kids is to leave the nest and strike on their own and be independent. Living with parents has a stigma attached to it. However, traditionally, kids lived at home. In some cultures, having the kids at home later in life doesn't have a stigma attached. In fact, some parents are thrilled to keep their kids at home longer or indefinitely (think 'mama's boys' or 'failure to launch' types).

Spain is a Latin country with a strong family tradition (let's not forget those relatives too). In tough times, kids can come back home to roost. Is Taiwan so different? Lots of kids are living with their parents (who have relative huge savings compared to their kids) indefinitely or have no qualms returning home if things go wrong or they need a break.

In fact, now that I think of it, western kids trying to live apart from their family creates unecessary duplication (another house and related costs) and spending (buying bulk saves more money). If there just weren't such a stigma attached to living with parents forever!

Taiwan will do fine in the face of this higher unemployment. No riots here. The sky may feel like it's falling but the family unit and emphasis on Taiwan families taking care of their own will prevail.

Stimulate This!

Well not exactly this kind of stimulation package but it enticed you to read this entry, did it not?

As you may well be aware, early next year every Taiwan citizen will be receiving a $3600 voucher from the government to stimulate spending. This is really in line with what a lot of nations are doing in order to keep their economies afloat through this financial crisis.

And I guess I am happy that something is being done instead of only hand wringing and hesitation. The medicine is bad any way you approach the issue but in many ways this crisis is aggravated by psychological factors. Even if this package is merely a placebo for the ills (I concede that it may just be), the psychological good it does will inevitably be positive. Believe me, people in Taiwan need more placebos like this in their dark economic hour to stay thinking positive even though it might be illusory.

Once again, it's psychology. Even if the package is just a drip in the bucket, it gives the perception that something is being done and this is important to people. I think the general consensus is that eventually the situation will improve but that it will take time. That's why it's a positive thing to relieve a little of the people's worries so that things (hopefully) don't sink so deep. Of course, the government has to nurture things in these dark times.

It's interesting to know that, even though many people are making the case that the package will do little or nothing, the voucher system instead of a tax break or cash back is more of a sound decision than it may seem. An economist makes this point...

"The standard stimulus package doesn't change incentives. It's a check from the government. The hope is that the receiver will spend it. But when you just send out checks from the government, whoever gets stimulated is likely to be offset by someone who gets unstimulated.

[....]

And even the people who get the money often save more of it than they spend.

That's why stimulus schemes based on giving people money have a poor track record of energizing the economy. Usually, the only thing that gets stimulated is a politician's approval rating."

NPR

What's interesting to note, though, is that Taiwan's government isn't just giving out cash or giving a tax break (which people can convert into cash and just save away without helping to stimulate the economy). People have to use the vouchers to buy products at businesses that issue receipts for purchases (which the tax department obviously likes since people pay their taxes (incidentally, this is the reason why the have the lottery on those receipts: it tries to keep businesses more honest about their books)).

Also, as implied in the report, some people have argued that the vouchers are just to buy voters since only citizens can receive them (that rules out us foreign paying taxpayers since we definitely cannot vote). However if that is the case, then why would a country like China also launch a stimulus package? It's not like they need to cater to their voters. However, they do need to keep its economy rolling to keep its citizens happy and that's purely psychological.

So there you have it. By me, the package seems reasonable as real stimulus or as a placebo or both. In the end, my Taiwanese wife for one will be spending her voucher with pleasure as will, I am sure, most of the people who receive one. Happy and positive spending!

Gold in the Age of Doom and Gloom

A nice Taiwan motif done in gold that I saw at Just Gold across from SOGO. Too bad gold prices are so high lately! I wonder if their business is hurting or is booming

And that's a funny thing about gold in hard times. It's interesting to note the Chinese obsession with things golden which can similarly be found in other places in the world like India. Gold, they say, is always useful in financial hard times so it doesn't hurt to have some stored away.

Gee, in these days of financial doom and gloom are we going to go back to melting down jewelry to make gold ingots to buy stuff or trade? Get out those antique gold weighing scales!

My 10NT's worth

In Canada, one of the first things I noticed was how light an shiny the coins are here compared to Taiwan's coins. The later are often scratched to hell, are filthy and weigh down in your pocket.

A quick look around the Wikipedia found this: wiki

It seems that Taiwan's silver colored coins are made with cupro-nickel (copper and nickel alloy). Aha, that explains it. Canadian silver colored coins are made with nickel, right?

Well, actually this is wrong. In fact, according to Wiki, Canadian coins
"in 2000, [...][had] plated-steel 1, 5, 10, 25 and 50 cents coins, with the 1 cent plated in copper and the others [dollar coins] plated in cupro-nickel".
wiki
wiki

The steel in the coins seems to explain why silver-colored Canadian coins are lighter and shinier (stainless) than their Taiwan counterparts. 10NT weighs 7.5 grams while the comparably sized Canadian quarter (25 cents) only weighs 4.4 grams.

The Canadian dollar coins do seem a bit duller in comparison due to their cupro-nickel exterior which fits with how the Taiwanese coins are. Plus they are fairly heavy. If you want to see and compare this, use the pictures and the information on the above mentioned wiki pages.

A bit about banks and banking

I thought I would write a bit about going to banks in Taiwan.

The first thing is about opening bank accounts. Usually businesses you work for will ask you to open an account with a bank of their choosing, usually as close as possible to the office. They do this because banks offer them deals to open multiple accounts. This is very different than in my native Canada where people have their pay deposited in their respective banks regardless of their name or location.

By the way, on an aside note, if you are free to choose a bank then there are a multitude of small and large banks to choose from in Taiwan. However, not all are in great financial shape. Of the top banks, I would recommend China Trust. Their service is fantastic, they are open later until 5pm instead of the regular 3:30 of most banks, they have a good financial advice section (I bought foreign mutual funds when other banks turned me down!) and they are efficient in their use of depositing bank machines. On the negative side, they didn't have safety deposit boxes free (all full they said) and they don't deal with a lot of foreign currency (I couldn't make Canadian travelers cheques there although American funds were ok. I went to ICBC and they had Canadian ones.).

Speaking of foreign exchange, here's a second thing I experienced recently. As I was planning a bit of travel and the exchange rates were decent, I decided to change some money. Being a month before my departure, I did not want to leave the money lying around the house. So I purchased traveler's cheques. Traveler's cheques are, as far as I can see, little used by Taiwanese. In fact, students have mentioned that they believe Taiwanese are easy targets for thieves when compared to foreigners for the very reason that they carry cash on them. This makes sense. So it makes you wonder why they don't think of using traveler's cheques. It may have to do with older people's mistrust of them or for the general reason that they are not convenient for Taiwanese. In Asia they usually need to be changed at banks as local merchants don't recognize them (apart from perhaps hotels).

The thing that stunned me the most when I purchased my cheques they did not ask me to sign them on the spot. Although I am not too sure why this happens (the cheques themselves have a message on them to sign upon receiving) I assume that the Taiwanese use the cheques as a way to send money to people by mail. A foreign friend of mine told me something about this.

Here's how it works. You want to send money overseas. You buy the cheques and do not sign them. You put them in a letter and send them overseas. If they are lost, you call the company and have them replaced (remember you keep the receipt for the cheques with the series numbers on it in case of theft). Otherwise, when they reach their destination, the receiver signs them and countersigns them and voila the money is transferred.

Just so you know, if you decide to get traveler's cheques like a good Westerner should, there may be some fees involved. The bank I went to gave US fund cheques no charge. CAD required a one time fee of $100 no matter how much money is changed. And remember to sign at least once before cashing the cheques. Some banks won't even cash them if they see the cheques were not initially signed. Finally, although you may get away with no charge on the purchasing end, there may be bank fees on the selling end.

So there you have it. If you have any other bank stories about depositing, withdrawing, wiring money, getting a safety deposit box or whatever, drop me a line.

Pain at the pump

Here we are. Fill 'em up and read it and weep.

I filled the tank on the scooter the other day. It was almost running on fumes. The cost $220!

This is truly amazing considering I used to fill up for a mere $80. Imagine what it costs to fill up a car.

Hopefully the Taiwanese, especially in big cities, will give up their love affair with their cars. There are far too many SUVs, jeeps, land rovers and vans in the city.

As for me, $220 is still affordable considering the convenience that a scooter offers. I don't feel so bad considering it is also fairly fuel efficient for the cost. I only have to fill up maybe every 2 weeks.

The logo is that of the China Petroleum Corporation. It's actually a decent logo. What's neat about it is that it incorporates the Chinese characters for the company inside the picture at the base of the torch. For a variation of the logo, go to my web pal's site, The Real Taiwan.

Cheese problems at Subway

I just encountered the food shortage problem at Subway today.

I noticed that when they made a large sub, they used to put 4 slices of cheese on. Lately they have only been putting 2. I thought this might just be the location that I went to. However, my friend also had the same experience at another location.

So today I asked what was going on. The girl there told me that their cheese came from Australia and that, because of drought, the cows weren't producing as much milk as usual. Also they pointed me to a fax that was posted. It said that the cheese problem was due to crops being shifted to ethanol production. With ethanol being so hot, more crops like corn are being planted to meet the demand and that means other land is being taken out of use for solely food production, for growing vegetables and fruit and raising animals.

I'm not sure what the clear connection is but the food shortage problem is in line with what has been happening in other parts of the world.

Oil prices have reached $117 a barrel. Egypt is trying to stem riots over the price of flour for breads and pasta. Vegetables in Taiwan are getting more and more expensive (this also happens after floods and typhoons because of crop damage). Even vegetable oil, a main staple of Chinese cooking,is creeping up. Things everyone took for granted are being affected.

If conversion to ethanol is really the problem then here is the crux of the environmental movements problem. Drastic changes like this have destabilizing effects as investors gauge the new value of the crops for fuel. And besides, is ethanol really a decent solution or even a stop-gap measure?

Oil and electricity prices have been capped until May 20. What happens after that is anyone's guess. Suddenly, that fourth nuclear reactor for Taiwan doesn't seem like such a bad idea. I wonder if the NIMBY (Not In My Back Yard) folks will soften under such energy need pressures. Would you rather have coal or prohibitively expensive and sometimes impractical alternative energy (wind, solar, hydro) which amount to just a trickle of what the country needs?

There are some difficult decisions to be made. For now, I decide to let those two extra slices of cheese go and pay the same price so I guess I'm doing my part.

Credit Card Slaves and the Strawberry Generation

How appropriate this card is considering the country is going to hell due to the credit card companies and the wave of credit card slaves they have created.

Well, I think the blame needs to be spread around. Partly to the credit card companies for being so greedy, partly to the banks who are so eager to earn money from the credit card companies, partly to the government for not seeing this coming or doing anything about it promptly and partly to schools and parents for not educating their kids (the Strawberry Generation) about using credit responsibly.

Their is a great article in Taiwanease called "Maxed Out Youth". Hopefully this fine magazine will have their website up soon (I've been told the first week of April).

http://www.taiwanease.com/
(UNDER CONSTRUCTION)

This is what I presume it will be like...
http://www.taiwanease.com/theknowledge/index.php?title=Main_Page