Starting next year, the monthly minimum wage is to increase by 4.05 percent to NT$27,470 and the minimum hourly wage is to be NT$7 higher at NT$183. As the minimum wage hike is still not enough to tackle the nation’s perennial low pay problem, the government’s executive and legislative branches are also working on establishing a minimum wage law that authorizes regular increases in the lowest hourly or monthly pay to safeguard workers’ basic livelihoods.
However, resolving the problem of low salaries in Taiwan requires more than the minimum wage increases, as the hikes benefit mainly marginal workers such as apprentices and part-time and unskilled workers, as well as migrant and dispatch workers, with limited impact on the nation’s salaried workers who earn above the minimum wage.
Last week, Vice President William Lai (賴清德), the Democratic Progressive Party’s (DPP) presidential candidate, proposed that financial regulators should consider a minimum wage review of companies wishing to be listed on either the Taiwan Stock Exchange or the Taipei Exchange, requiring such firms to offer workers more competitive wages when they seek to go public. He suggested that the minimum monthly wage in future listed companies should be no less than NT$30,000.
It remains to be seen if Lai’s proposal is workable. Some people have warned that if this were to be a prerequisite for initial public offering (IPO) approval, companies might have corresponding measures in place after going public, such as laying off low-wage workers or using dispatch workers mainly within some of their operations, which would be an undesirable policy outcome.
On the issue of low wages among Taiwan’s young people, New Taipei City Mayor Hou You-yi (侯友宜), the Chinese Nationalist Party’s (KMT) presidential candidate, in September proposed a gradual increase of the minimum wage to NT33,000 with incentives for companies willing to raise salaries, if he is elected. He also advocated a wealth tax on the rich, as the gap between rich and poor continues to widen in Taiwan.
As election campaigns continue to gain momentum, presidential candidates have all focused on attention-grabbing issues. However, whether Hou can convince voters remains to be seen as, for example, there is no fixed timetable for achieving his minimum wage goal of NT$33,000, while his wealth tax proposal might irk affluent individuals.
Taiwan People’s Party (TPP) Chairman and presidential candidate Ko Wen-je (柯文哲) recently offered voters some ideas on how they should think about the problem of low wages for the youth, which he attributed to the majority of Taiwanese industries exhibiting low added value and the poor performance of the nation’s higher education system.
Ko was right when he said minimum wage level has nothing to do with low salaries -— these two issues need to be dealt with separately. However, his comments were not as clear in adressing the problem of Taiwan’s low wages. He said that local industries need to move higher up the value chain for wages to rise. However, the truth is that businesses have little incentive to invest in innovation for higher value as workers are paid such low wages.
Ko typically made some controversial remarks, which might have been slips of the tongue or a demonstration of his disrespect for diversity and inclusion. He said a cruel reality of low wages is an oversupply of low-value graduates in the current education system, adding that certain university departments need to downsize if the average starting salaries of their graduates are too low.
The issue of low wages encompasses culture, education, society and economy. There is no cure-all solution. As it is unclear if each candidate can fulfill his promises, voters should weigh carefully before casting their ballot.
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