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New Economic Immigration Act in Taiwan will boost domestic economy: CIER

Draft bill to attract foreign nationals would create more jobs, raise real wages and GDP say proponents

(Photo by Pixabay user rawpixel)

(Photo by Pixabay user rawpixel)

TAIPEI (CNA) -- A draft bill aimed at attracting foreign nationals to fill the workforce gap in Taiwan is likely to create more job opportunities, raise real wages and boost the domestic GDP, research by a local think tank indicated Saturday.

The New Economic Immigration Act, put forth by the National Development Council (NDC) and currently under review in the Legislature, could produce 5,000 new jobs, raise average real wages (wages adjusted for inflation) by 0.623 percent, and boost the country's GDP by 0.041 percent, a report by the Chung-Hua Institution for Economic Research (CIER) showed.

The NDC is hoping that the draft bill, which targets people with intermediate skill levels such as technicians and personal health care workers, could address the shortage in those fields in Taiwan.

Government statistics show that in 2017, Taiwan had a labor shortage of 218,000 workers, with 55 percent of the positions being for mid-level technicians, mainly in the manufacturing sector.

Local labor groups have raised concerns that the introduction of the bill would take jobs away from Taiwanese, but CIER said that is not likely because the bill makes provisions to protect local workers.

In the bill, a minimum salary has been set for the employment of foreign workers, which is higher than that for local employees, and it specifies that those positions can only be filled by foreign nationals if Taiwanese do not want the positions, CIER said.

The minimum salary for foreign workers will be at least in the 70th percentile of the average salary for each occupation, which will be NT$41,393 (US$1,341) for industrial technicians and NT$32,000 for health care workers, CIER said, using 2018 pay data.

He said the introduction of foreign workers to meet the current workforce demand will increase production and output, which in turn will drive demand for more local manpower, creating a virtuous cycle, said Hsin Ping-lung (辛炳隆), an associate professor at National Taiwan University's Graduate Institute of National Development, who was part of the CIER research team.

While the bill might create difficulties for some categories of Taiwanese job-seekers, the negative effects will be insignificant compared with the benefits, Hsin said.

According to the NDC, the "mid-level technicians" mentioned in the bill will not be considered blue-collar workers because they will be subject to specific requirements, including professional certification, minimum salary levels, and caps on the total number of such positions that may be filled by foreign nationals in each industry.

The draft bill has won the support of local business representatives, including Tsai Lien-sheng (蔡練生), secretary-general of the Taiwan-based Chinese National Federation of Industries.

Tsai said he hoped the government would invest more resources in the bill to help upgrade local industries.

Hsu Sheng-hsiung (許勝雄), chairman of the Third Wednesday Club, a group of business leaders who meet on the third Wednesday of every month, said the proposed act would help fill job openings that Taiwanese do not want.

Although many local industries are moving toward automated manufacturing, they still need people, he said.

In fact, technicians are needed around the clock to make sure the automated facilities are functioning properly, Hsu said, adding that few Taiwanese are willing to take graveyard shifts.

If the labor shortage is not addressed, local businesses will be forced to relocate overseas for easier access to labor, he said.