Labor, management at odds over minimum wage hike proposal

Taipei,  Labor groups on Tuesday praised a proposed minimum wage hike for this year, while industry representatives expressed disappointment, saying that it would create a greater burden for businesses amid the COVID-19 pandemic.

The Basic Wage Deliberation Committee, convened by the Ministry of Labor and comprised of workers, employers and scholars, said Tuesday that the minimum monthly wage in Taiwan should be raised NT$200 (US$6.8) to NT$24,000, while the minimum hourly wage should increase NT$2 to NT$160.

The proposal still needs to be approved by the Cabinet. If passed, it will apply to all workers in Taiwan except for foreign domestic workers, who are not covered under the Labor Standards Act.

The Taiwan Labour Front welcomed the proposal, saying in a statement that a rise in the minimum wage would make a tangible improvement in the lives of workers.

“Although the (proposed) increase this year is small, raising the minimum wage now will spur consumption, and improve the lives and economic development of many workers,” the group said.

The basic wage in Taiwan has barely risen over the past few decades and is still relatively low, the group said, adding that in the past four years, when minimum monthly wage was increased by around NT$1,000 annually, it did not have the negative impact on the unemployment rate that employers had predicted.

Employers, however, voiced opposition to the proposal, saying that it would be too great a burden for small and medium-sized businesses amidst the COVID-19 pandemic.

The pandemic, coupled with the trade war between the United States and China, have forced many industries into difficult situations and a minimum wage hike would make these situations worse, said Tsai Lien-sheng (

), secretary-general of the Chinese National Federation of Industries.

The increased costs faced by businesses are not as small as they appear, Tsai said, as a rise in the minimum wage will also lead to an increase in health insurance and labor insurance costs.

Tsai said that although he will respect the government’s decision, he cautioned that a rise could lead to an increase in unemployment.

According to Darson Chiu (邱達生), a scholar at the Taiwan Institute of Economic Research, adjustments to the basic wage reflect the rate of economic growth and uncertainty over the pandemic.

Last week, the Directorate General of Budget, Accounting and Statistics (DGBAS) forecast that Taiwan’s gross domestic product (GDP) growth in 2020 would be 1.56 percent, but the rise in the monthly minimum wage was not as high because it is still unclear how the pandemic will impact the world in the coming months, Chiu said.

In general, a slight hike should be an acceptable proposal for both sides, he said.

Cheng Chih-yu (成之約), head of the Graduate Institute of Labor Research at National Chengchi University, criticized the rise, however, saying that the hourly salary increase of NT$2 was “way too small.”

Although the hike will not be too much of a burden on employers, workers won’t be able to actually feel the benefits, Chiu said.

Dachrahn Wu (吳大任), an economics professor at National Central University, described the slight increase as a “symbolic gesture”, meant to convey that the government is still paying attention to labor issues.

This gesture will still be of something of a burden to Taiwanese companies, however, especially those in the traditional manufacturing industries, Wu said.

These industries have suffered huge losses in orders due to the pandemic and since their products are mostly produced in Taiwan, even a slight rise in the basic wage will have a negative impact.

Speaking to reporters on Tuesday, Minister of Labor Hsu Ming-chun (許銘春) said that the aim of raising the minimum wage is to help the most disadvantaged in society.

Given the difficult economic situation this year, the amount was only increased slightly, but it will still be beneficial, Hsu said.

Executive Yuan spokesperson Ting Yi-ming (丁怡銘) also praised the proposal, saying that it would benefit the more-than 1.5 million workers in Taiwan who receive minimum wage, without causing too much of a strain on businesses.

 

Source: Focus Taiwan News Channel

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