Taiwanese business groups have criticized the government's decision to raise the minimum wage by over 4 percent from next year, citing already tough economic conditions, while labor advocates called for overhauling the committee-based process through which such decisions are made.
At a meeting Thursday morning, a Ministry of Labor (MOL) review committee agreed to raise Taiwan's minimum monthly wage by 4.55 percent, from NT$25,250 (US$828) to NT$26,400, and the minimum hourly wage by 4.76 percent, from NT$168 to NT$176, from Jan. 1, 2023.
The increase, while well short of the 10-percent hike that some labor groups had urged, drew criticism from business groups, which had hoped for it to be less than 3 percent.
"Raising the minimum wage again during the pandemic is like rubbing salt on the wounds of the service industry," Hsu Shu-po (???), chairman of the General Chamber of Commerce of the Republic of China, said at a press conference.
Aside from driving up employers' labor and health insurance costs, the move comes at a time when businesses are already facing higher costs for raw materials and electricity, Hsu said.
"In response, it is only natural that companies will start raising prices, thus further driving up inflation," he warned.
Echoing Hsu, Lee Yu-chia (???), head of the National Association of Small & Medium Enterprises, said the increase was "higher than expected" given the current state of the economy, and urged the government to consider offering tax cuts or preferential loans to ease the impact on businesses.
On the other side of the issue, meanwhile, the Taiwan Labor Front (TLF) called for reforming the current system, in which a Ministry of Labor committee comprising business, labor, government, and academia representatives recommends wage adjustments on a yearly basis, which are nearly always approved by the Cabinet.
While a minimum wage increase is needed to offset rising prices, the government's real priority should be passing a Minimum Wage Act to make the entire process more transparent, rational, and fair, the group said in a press release.
Others argued that the 4-percent raise was effectively a compromise between capital and labor, amid an economic environment that has been challenging for both.
Chen Yin-jou (???), public relations director at Taiwan's 1111 job bank, said the increase was within a range that most companies can accept, and would offer workers some relief as they try to cope with the rising cost of living.
The larger problem is that the majority of Taiwanese workers have salaries which have remained more or less stagnant for years, mainly as a result of inequitable profit-sharing by their employers, she said.
In response to the business groups, the Ministry of Economic Affairs said it would look into offering subsidies to companies affected by the minimum wage hike before the end of this year.
Source: Focus Taiwan News Channel