MOL proposes to hike minimum wage to NT$22,000 (update)

Taipei--The Basic Wage Deliberation Committee under the Ministry of Labor (MOL) has proposed to raise the minimum wage to NT$22,000 (US$724) for 2018 from the current NT$21,009.

The committee also proposed during a meeting on Friday to increase of the minimum hourly wage to NT$140 from the current NT$133, according to the Ministry of Labor.

The proposed hike needs to be approved by the Executive Yuan before taking effect on Jan. 1, 2018.

The committee, comprised of representatives of labor and business groups as well as government officials and academic experts, meets in the third quarter every year to discuss whether the minimum wage should be raised in the following year.

It deliberated for seven hours on Friday before deciding to propose a 4.72 percent increase in the minimum wage in 2018.

At a news conference held after the committee reached its conclusion, Minister of Labor Lin Mei-chu (???) said an estimated 2.05 million workers, including 390,000 hourly paid employees, will benefit from the wage hike.

Lin said labor groups felt the hike failed to meet their expectations but was still acceptable while business representatives were disappointed with the consensus, which she said was backed by a majority of members of the wage committee.

Chen Fu-chun (???), head of the Confederation of Trade Unions in Hsinchu County, agreed with Lin, saying the decision was acceptable to representatives of labor unions.

He stressed, however, that there was still a wide gap between the proposed minimum wage and the NT$27,711 labor groups had hoped for.

Before Friday's meeting was held, the Taiwan Confederation of Trade Unions (TCOTU) urged the deliberation committee to heed the voices of labor groups for a much higher minimum wage, but it later hoped the Cabinet will approve the recommendation as NT$22,000 was labor's bottom line.

Ho Yu (??), a director of the Chinese National Federation of Industries, said representatives of business groups strongly opposed the proposed wage hike and left the meeting before the discussion was over and did not endorse the final decision.

In a phone interview with CNA, Ho described the proposed wage hike as simply a political decision that failed to take the business group's opinions into account.

Republic of China General Chamber of Commerce Vice Chairman Hsu Shu-po (???) had previously suggested a hike of 2.14 percent, but the suggestion was rejected in the committee.

Ho said the hike will not only raise compensation but also health and labor insurance payments by employers (which are based on monthly salary levels), raising their costs by nearly NT$30 billion a year.

Those costs include an increase of more than NT$20 billion in wages and insurance premiums for domestic workers and an increase of NT$5 billion in wages for migrant workers, most of whom receive the minimum wage.

Cheng Chih-yu (???), professor of the Institute of Labor Research of National Chengchi University, said it was unlikely that the 5 percent hike in the minimum wage will reverse Taiwan's wage stagnation.

Cheng said the government should come up with other measures such as tax incentives to encourage businesses to pay more to their employees.

Source: Focus Taiwan News Channel