Taiwan's record-breaking economic growth has a problem: most of the country isn't feeling it — and now foreign media are saying so out loud.
The Hankyoreh, a major South Korean daily, recently published a lengthy feature on Taiwan's economy under the headline "Beggar Superman Living in the Eggshell Zone." The paper's argument was blunt: Taiwan's headline numbers are extraordinary, but the lives of ordinary Taiwanese tell a very different story. Its conclusion was pointed enough to sting — South Korea should treat Taiwan as a cautionary tale.
The irony is hard to miss. Taiwan has long outperformed South Korea on income distribution. Its economy was built on small and medium-sized enterprises rather than the chaebol conglomerates that dominate Korean industry, and that structural difference historically produced a more equitable spread of household income. By the standard quintile ratio measure, South Korea's top earners take home 7.2 times more than those at the bottom; Taiwan's ratio stands at 6.14. On paper, Taiwan has consistently done more with less inequality.
That a Korean newspaper is now invoking Taiwan as a warning to its own readers is uncomfortable. More uncomfortable still is that the warning is largely accurate.
A Semiconductor Supercycle That Bypassed Most Of The Economy
The fault line runs through Taiwan's industrial structure. The US-China technology rivalry, which sharpened from 2018, and the global AI investment wave that followed after 2022 have combined to produce a historic boom in Taiwan's semiconductor sector. But that boom has not spread. Traditional manufacturing and the services industry have been largely untouched by it.
The data show how concentrated the gains have become. Exports as a share of GDP have climbed from roughly 55% to nearly 70%. Within that export base, ICT products — already the dominant category — have surged from around 40 to 50% of total exports to close to 80%. Taiwan's economy is more narrowly dependent on a single technology cluster than at any point in its modern history.
A survey of Taiwan's top 5,000 companies published recently by the China Credit Information Service sharpens that picture. Overall revenues rose — yet the number of loss-making firms hit a ten-year high, and the gap between the highest- and lowest-ranked companies kept widening. The research firm identified four sectors it described as the "four suffering industries," among them food and beverage services, which are hovering near break-even, and traditional manufacturing, which is generating almost no returns for shareholders.
Wages Tell The Story Headline GDP Figures Hide
The divergence shows up most clearly in wages. Taiwan's average monthly salary runs at roughly NT$45,000 to NT$50,000, but the median sits only around NT$39,000 to NT$40,000. That persistent gap — and the fact that it keeps widening — reflects the technology sector pulling up the average while the rest of the labor market stagnates. Close to 70% of salaried workers earn below the average. It is a textbook M-shaped labor market.
The international comparison is harder to dismiss. Taiwan's GDP per capita has surpassed South Korea's and is projected to extend that lead in coming years. Yet starting salaries for university graduates in South Korea run 41% higher than in Taiwan. By average monthly wages, Taiwan ranks last among the four Asian Tiger economies, trailing South Korea by NT$68,000 per month.
Pull back to a 30-year horizon and the picture is starker still. In the early 1990s, the labor share of national income — the portion of GDP distributed to workers as wages — exceeded 50%. Today it has fallen to 43%. In industrial output, labor's share dropped from 55% in 1986 to 27% today; corporate operating income, meanwhile, nearly doubled from 24% to 44% over the same period. Three decades of expanding economic output have delivered a steadily shrinking slice to the workers who produced it.
Why Uneven Growth Becomes A Structural Risk
This is not only a question of fairness. In The Rise and Fall of Nations, Ruchir Sharma — formerly chief global strategist and head of emerging markets at Morgan Stanley — examined the relationship between inequality and long-term national growth across dozens of countries. His central finding: severe imbalance in income distribution and the concentration of development ultimately constrains a country's capacity to grow further. The archetypal cases were Latin American economies — nations with genuine resources and real development potential that nonetheless became trapped below advanced-economy status, held back in large part by structural inequality.
Taiwan has, by most measures, crossed the threshold into the ranks of high-income economies. But the imbalances accumulating during that transition represent a genuine risk to what comes next. Domestic scholars and commentators have raised these concerns for years. The fact that a foreign newspaper is now making the same argument — and framing it as a lesson for its own readers — may carry more weight with policymakers than years of domestic debate have managed to. The government should not need an outside mirror to see a problem this plainly. It should act on it now. （Related： Taiwan's 10% GDP Surge Cannot Hide Its Structural Risks ｜ Latest ）
