Talk of the Day -- Pros and cons of minimum wage increase

The Council of Labor Affairs (CLA) proposed Wednesday that the minimum hourly wage be increased from NT$109 (US$3.6) to NT$115, with effect from the beginning of next year, and the monthly wage be raised by NT$226 to NT$19,273, starting July 1, 2014. The proposed hikes, however, will come with a condition: from then on, the next Minimum Wage Review Committee meeting will not be convened until the annual growth rate of the consumer price index (CPI) reaches 3 percent or higher. While some local scholars threw support behind the CLA proposal, major labor rights groups slammed the plan as absurd and illegal. Hsin Ping-lung, an associate professor with National Taiwan University's Graduate Institution of National Development, said the wage review committee's annual meeting has conventionally spurred labor-management confrontation and resulted in a waste of social cost. "Therefore, I support the establishment of a better mechanism for adjustment of minimum wages," Hsin said. In his view, Hsin said, the CLA proposal of pegging the holding of the review committee meeting to a 3 percent or higher CPI increase is a good idea. Sun Ming-teh, director of the Center for Economic Forecasting of the Taiwan Institute of Economic Research, echoed Hsin's view, saying the minimum wage requirement is a form of welfare benefit that can protect labor rights. "Adjusting minimum wage in reference to the CPI is a feasible way to help wage earners fight inflation," Sun said. Labor rights advocacy groups, however, said the CLA-proposed CPI threshold bucks the trend of protecting labor rights and violates existing regulations. Sun Yu-lien, secretary-general of the Taiwan Labor Front, said the existing statute on minimum wage review stipulates that the review committee should convene a meeting in the third quarter of each year to consider whether the minimum wage should be adjusted. Moreover, he said, the statute requires the committee to decide whether the minimum wage should be adjusted in terms of a number of factors, including the domestic economic situation, the Whole Sale Price Index, the CPI, GDP, per capita GDP, job market situation and household income. "The CLA-suggested change to peg the adjustment simply to the CPI's rise is unacceptable and not legal," Sun added. A special report in the Wednesday edition of the United Evening News also quoted some other labor rights activists as saying that discussion of minimum wage issues would turn out positive or constructive conclusions only when local employers would treat their employees like corporate shareholders. They said South Korean companies have continued to raise their employees' salaries by 6.1 percent to 7.2 percent over the past two years. "I couldn't understand why South Korean companies can while our corporate owners cannot follow suit," said Chiu Chuan-tien, a board member of the Taiwan Federation of Labor.
The CLA's minimum wage adjustment proposal is still pending approval of the Executive Yuan. (Aug. 28, 2013). (By Sofia Wu)