According to official figures, Taiwan has a low poverty rate. With a 2025 GDP per capita of $37,000, Taiwan is a high-income, advanced economy. Taiwan measures the poverty rate officially by classifying only those with an income below 60% of the median income as “in poverty,” which is around 2.6% of the population. Moreover, Taiwan has a range of social welfare policies to address needs, which include social housing, income support, free basic health care and free education.

Definitions of Poverty

Wider definitions of poverty are more appropriate for developed economies. The most common approach is relative poverty, which the OECD defines as those with an income below 50% of the median income, and by this classification, not only are Japan and Korea at 15% but even Scandinavian countries are above 5%. The EU also focuses on those at risk of poverty or social exclusion and includes other measures, such as the affordability of certain basic items, which represent an adequate quality of life. Such wider definitions are important because they focus government attention on policy measures to address relative poverty and mitigate risks of social breakdown.

Most importantly, these comparative figures suggest that the Taiwan figures disguise the actual situation in Taiwan. Applied to Taiwan, a poverty rate of between 10% and 15% would suggest that there are between 2 and 4 million people in relative poverty. This lines up with a 2023 NGO survey in Taiwan, which found that 9% of respondents claimed to live in poverty.

The Causes of Poverty

Unsurprisingly, Taiwan suffers from many of the same conditions that afflict other developed societies. These include a high cost of living – especially high housing costs in Taipei – stagnant median wage levels and increasing income inequality. Recent analyses of wages and living costs have criticized Taiwan’s minimum wage of $900 a month as one of the lowest in advanced economies.

While the cost of living is around 20-25% more expensive in Western European countries, Taiwan’s minimum wage is around 150% higher. In other advanced economies, the minimum wage has been increased to mirror a “living wage” defined as the minimum for an adequate lifestyle. However, in Taiwan, the minimum wage is less than 50% of the “living wage.” Taiwan also has one of the highest income inequality ratios of advanced countries. Finally, Taiwan’s low minimum wage has a correlation with poor performance on a range of social indicators, including high child mortality, road and pollution deaths, homicide and suicide rates, prison population rates and mental health rates.

An NGO Responds

One of the leading domestic NGOs addressing poverty in Taiwan is called Do You a Flavor. Founded in 2014 and focusing on urban poverty, Do You a Flavor works with a range of initiatives with a focus on homelessness. These include collaboration with businesses to establish transitional housing, food distribution, medical aid, skills development and job matching. The NGO also does advocacy work, working with other NGOs and government agencies to achieve legislative change to address urban poverty.

Public Policy Responses

As mentioned, Taiwan does have a range of social welfare policies in place. However, many of these policies are actually quite restrictive. A key issue is that the household rather than the individual is the basis for poverty definitions and welfare eligibility. Another is that anyone 16-65 years old in the household is assessed as employed at the minimum wage, even if unemployed. These are just two of many restrictions that derive from viewing the household as the core economic unit rather than the individual.

Improving access to welfare is only one part of what many view as much-needed policy reforms. These include increasing the minimum wage and improving workers’ rights. Increasing the availability of social housing in Taipei, as well as other measures to dampen property costs, are also seen as essential to ensuring affordability.

– Trinity Prasadam

Trinity is based in Taiwan and focuses on Business and Technology and Solutions for The Borgen Project.

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