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Business groups slam wage increase

Local business groups yesterday deplored the government's decision to raise the minimum wage, saying the hike would have a big impact on their operations and hurt the nation's competitiveness.

Their reaction came after Premier Chang Chun-hsiung (張俊雄) announced yesterday that the minimum wage would go up by 9.09 percent to NT$17,280 (US$525) and the minimum hourly wage for part-time employees would be raised from NT$66 to NT$95, which came as a surprise to business groups.

"The raise is far from what we can accept," said Roscher Lin (林秉彬), chairman of the National Association of Small and Medium Enterprises (中小企業協會).

The association, along with five other major business groups, has held discussions with the government about the hikes and made a joint statement last month to articulate their position.

They said the hike would have a negative impact on the nation's competitiveness as companies might decide to seek cheaper labor overseas. At the time, they hoped the hike would not exceed 5 percent, while the hourly wage would start at NT$82.

The measure will benefit 2 million people working for 250,000 small-sized companies, Lin said. But employers of these companies have to budget NT$35 billion more per year for personnel, which excludes increases in employees' labor and health insurance fees following the salary increase, Lin said.

Officials at the National Association of Small and Medium Enterprises and Taiwan Chain Stores and Franchise Association (台灣連鎖暨加盟協會) visited the Ministry of Economic Affairs to discuss the matter yesterday.

"This is really not a good time to raise the minimum wage," said Tsai Hung-ming (蔡宏明), deputy secretary-general of the Chinese National Federation of Industries (全國工業總會).

To help the companies cope with rising costs, the Ministry of Economic Affairs announced last night it would set up a service to advise companies on how to reduce operational costs.

The ministry will also allow restaurant operators to apply for the NT$20 billion government preferential loan.

State-run enterprises under the ministry should procure products from the affected companies, as well as providing venues for them to hold promotional events, it said in a statement.

CNFI's Tsai said the nation's economy was recovering, which would also help the jobs market. But once companies — especially small enterprises that cannot afford the extra costs — shut down their businesses or move overseas, many workers will lose their jobs, he said.

The CNFI estimated that if the minimum wage went up 11 percent, average profits at large enterprises would drop from 1.59 percent to 1.55 percent, while that of small and medium sized ones would decrease for 0.47 percent to 0.75 percent.

The retail industry, which hires a large number of part-time employees, is expected to bear the brunt of the 44 percent-hike in hourly wages.

The operational costs will certainly increase for President Chain Store Corp (統一超商), which operates 7-Eleven, the nation's largest convenience store chain, public relations official Amy Luan (欒美雲) said yesterday. But the company has not decided whether it would adjust its personnel structure, she said.

Hypermarket operators Carrefour Corp Taiwan (家樂福) and Far Eastern Geant Co (愛買) said the measure would not influence their companies, as the salaries they offered their employees were already higher than the adjusted minimum wages.
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