Employee Material Welfare

The purpose of this article is to provide an overview of Taiwan's average wages (or earnings) in comparison with advanced OECD economies and Singapore. Taiwan's government-published earnings and labor compensation surveys report a lower level of labor compensation than the figures found in national account statistics. Average wages estimated from national accounts also indicate significantly higher levels than those reported in the earnings survey. The OECD reports average annual wages derived from national account statistics. Therefore, in this article, Taiwan's average wages are sourced from national accounts rather than the earnings survey. It is important to note that the figures presented by either the OECD or this article may not fully align with the general public's experience.

In this analysis, employee material welfare is measured by net income, calculated from average annual wages minus the corresponding income tax and social contributions, for non-elderly single-person households, and then adjusted for per-capita social transfers in kind. (e.g., government spending on goods and services related to health, education, and other welfare programs for households). The cost of living is also taken into account. The results are quite astonishing—in 2023, Taiwan ranks among the top five countries in employee material welfare, even surpassing the United States (see Figure 1).

§ Links:
…… Table 1. Raw data in 2023 and data sources
…… Table 2. OECD-Eurostat
…… Table 3. Taiwan and Singapore (in Mandarin)
…… The original artical in Mandarin


Due to variations in methodology, median wages (or earnings) cannot be reliably compared across countries outside Europe. Instead, average wages are used, calculated from national account statistics by dividing total wages and salaries by the number of employees and converting the result into full-time equivalent units. To perform this conversion, wages and salaries per employee are multiplied by the ratio of average usual weekly hours worked for full-time dependent employees in their main job to average usual weekly hours worked for all dependent employees in their main job. Full-time employment is defined as usual weekly working hours of 30 or more per week in the main job.

More precisely, employee material welfare is measured as the net income of an average-wage, non-elderly single adult, calculated using the OECD tax-benefit model and adjusted for social transfers in kind from general government on a per-capita basis. This value is converted to US dollars using current purchasing power parities (PPPs) for actual individual consumption (AIC). This approach presents a different perspective from that of the household-based analysis.

Figure 1 illustrates the employee material welfare level and average annual wages, with the latter converted to US dollars using current PPPs for private consumption.
Figure 2 shows net income, also converted to US dollars using current PPPs for private consumption. Data on average annual wages of OECD countries and the OECD tax-benefit model are sourced from the OECD. (See Table 1 and 2 for more details. Raw data and sources for Taiwan and Singapore are provided in Table 1 and 3.)

It should be noted that the original OECD data for Iceland and New Zealand refers to compensation of employees, rather than specifically to wages and salaries. Similarly, the governments of Taiwan and New Zealand report only compensation of employees in their national accounts, without providing precise figures for wages and salaries. Therefore, the data for these countries have been further estimated. In the case of Iceland, wages and salaries can be easily derived from OECD sources, as this breakdown is available in its national account statistics. For Taiwan and New Zealand, however, additional data is required for estimation—specifically from earnings and labor compensation surveys. (See Table 1 for more details.)

The representativeness of average wages depends on the proportion of full-time employees relative to total employees. A lower proportion reduces the relevance to the majority of workers. The Netherlands exemplifies this, having the lowest proportion of full-time employees among advanced economies. In contrast, Taiwan has one of the highest proportions.

Taiwan's high material welfare is partly attributed to its low cost of living, which is significantly influenced by government interventions—such as subsidized electricity and fuel prices, lower labor costs in healthcare and education, and undervalued currency.

Figure 1

Figure 2

The raw data on average wages for Singapore are not derived from national account statistics and refer only to its citizens and permanent residents, which may result in overestimated figures. In the case of Singapore, net income is defined as gross income minus income tax and contributions to the Central Provident Fund (CPF). Country code: See the Eurostat Website.