Groups react to minimum pay hike

Labor representatives expressed disappointment, while major business groups called for relief measures after a Ministry of Labor committee on Thursday approved a 4.745 percent increase to the minimum wage.

At its annual meeting, the Minimum Wage Deliberation Committee agreed to raise the monthly minimum wage to NT$30,900 from NT$29,500 and the hourly rate to NT$205 from NT$196, effective on Jan. 1 and pending Cabinet approval.

The adjustments, which include a NT$1,400 hike that would take the monthly minimum wage above NT$30,000 for the first time, are expected to benefit about 2.61 million people, including 414,400 migrant workers.

Representatives of labor groups gesture at a news conference outside the Minimum Wage Deliberation Committee meeting in Taipei on Thursday.

Photo: Lo Pei-de, Taipei Times

Tai Kuo-jung (戴國榮), one of the labor representatives on the committee, said after the meeting that they had pushed for a 7.77 percent increase so workers could share more fully in the benefits of economic growth, with this year’s GDP projected to rise 11.05 percent.

Employer representatives initially sought an increase of no more than 3 percent, arguing that industries had contributed to Taiwan’s economic growth to varying degrees, Tai said.

Employer representatives had argued that the NT$1,400 increase demonstrated their willingness to compromise, as monthly minimum wage increases in the past few years had not exceeded NT$1,250, he said.

However, labor representatives rejected that argument, Tai said.

“If we are going to look at the previous high of NT$1,250 for the monthly wage increase, why can’t we also look at this year’s economic growth rate?” he said.

The final result fell short of labor representatives’ expectations, Tai said.

Cheng Li-chia (鄭力嘉), another labor representative, described the result as “unsatisfactory, but acceptable.”

Meanwhile, business groups said that the increase would put additional pressure on firms that had not benefited equally from recent economic growth.

General Chamber of Commerce of the Republic of China chairman Hsu Shu-po (許舒博) said that labor-intensive and traditional industries rely heavily on migrant workers, meaning a higher minimum wage would increase their labor costs.

For small, medium-sized and micro businesses with limited ability to pass higher costs on to customers, the impact would extend beyond wages, as the increase would also raise employers’ statutory contributions to labor insurance, labor pensions and National Health Insurance, which are tied to workers’ pay, Hsu said.

The government should consider shouldering a larger share of insurance costs, as employers pay 70 percent of labor insurance premiums for employees, compared with 20 percent paid by workers and just 10 percent by the government, he said.

He also called for eligibility requirements to be relaxed and application procedures simplified for government support measures aimed at helping businesses cope with the minimum wage increase.

The Chinese National Association of Industry and Commerce, Taiwan urged the government to provide financing and other substantive support to help small and medium-sized enterprises upgrade and transform their operations as the minimum wage is raised.

Support would help businesses boost productivity and increase the added value of their products, it said.