Taiwan’s minimum wage “should go up,” but it would present a predicament for the government balancing a booming export sector and anemic domestic demand, Minister of Economic Affairs Wang Mei-hua (王美花) said on a Z Media (震傳媒) show hosted by Frances Huang (黃光芹) yesterday.
Coordinating measures would need to go hand-in-hand with an increase in the minimum wage to ensure businesses that are not sharing in Taiwan’s booming export-driven economy are not excessively battered, Wang said.
“With estimated GDP growth of 5.88 percent [forecast by the Directorate-General of Budget, Accounting and Statistics], it is hard not to raise the minimum wage,” Wang said. “However, due to the impact of the local COVID-19 outbreak, many domestic businesses are in rough shape.”
Photo: Liu Hsin-te, Taipei Times
“I’ve never seen such a bifurcated situation and the government must think carefully about how to act,” she said.
The nation’s minimum wage is NT$24,000 per month, or NT$160 per hour.
Labor rights advocates have long called for increases of more than 2 to 3 percent in the minimum wage, but National Central University economist Dachran Wu (吳大任) said Taiwan’s economic engine could splutter if the wage is set too high.
“First, we have a disproportionately large share of small and medium-sized enterprises here in Taiwan where the bosses are not wealthy and they are operating on the edge of profitability,” Wu said. “A higher minimum wage could push them over the edge, destroying jobs.”
Taiwan’s export-oriented economy could also be at risk as the minimum wage is the same for foreign laborers, who are often employed by Taiwan’s electronic devices manufacturers, as it is for Taiwanese.
“It is a human rights issue to have a different minimum wage for Taiwanese and non-Taiwanese, but if we raise the minimum wage too high we are making our electronic exports uncompetitive,” Wu said.
Despite those factors, Wu is advocating a higher-than-usual increase in the minimum wage of 5 percent this year.
The reason is not just the predicted GDP growth of 5.88 percent, but because inflation is expected to be 1.7 percent this year, relatively high in his view as the government usually keeps inflation under 1 percent, he said.
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