TAIPEI (Taiwan News) — Taiwan labor representatives are proposing a 5.75% increase in the minimum wage next year, which would raise monthly pay to about NT$31,196 (US$997) as the government weighs how to balance workers’ incomes with uneven economic growth.
The Minimum Wage Review Committee will meet Sept. 24, and the labor ministry said Friday that an 11th consecutive annual increase is highly likely, per UDN. The current minimum wage is NT$29,500 per month and NT$196 per hour, while President Lai Ching-te (賴清德) and Premier Cho Jung-tai (卓榮泰) have said next year's monthly wage will exceed NT$30,000.
Outside estimates have put the increase at 5% or higher, while applying the traditional formula of fully reflecting inflation and sharing half of economic growth would produce a hike of about 7.6%. The Directorate-General of Budget, Accounting and Statistics recently raised its forecast for economic growth this year to 11.05%, while consumer prices are projected to rise 2.07%.
Taiwan's economic expansion has been heavily concentrated in high-tech industries, creating sharp differences in business conditions across sectors, UDN reported. At a minimum wage consultation meeting in late July, Chinese National Federation of Industries Executive Director Sam Ho (何語) asked the labor ministry to provide data on each industry's contribution to economic growth as a reference for setting the new wage.
Taiwan Confederation of Trade Unions Chairman Tai Kuo-rong (戴國榮) said labor representatives would not insist on an equal share of economic growth in the minimum-wage calculation because of the widening gap between industries. Instead, labor representatives propose factoring in one-third of GDP growth and fully reflecting the 2.07% increase in consumer prices, producing a minimum wage increase of about 5.75%.
Hsin Ping-long (辛炳隆), an associate professor at National Taiwan University's Graduate Institute of National Development, said there is no statutory formula for setting the minimum wage and that the practice of dividing economic growth equally between labor and employers should be abandoned, according to UDN. He said high-tech output has boosted GDP growth despite employing relatively few workers, so applying the overall growth rate could overstate conditions in industries with many low-wage workers.
Hsin said it would nevertheless be unreasonable to completely exclude the high-tech sector's contribution to economic growth. Tsai Ming-fang (蔡明芳), an economics professor at Tamkang University, said the committee should also consider labor productivity, arguing that higher productivity reflects increased output to which workers contribute and should therefore be reflected in wages.
