Planning the 21st century economy

The employees who are needed in the era of a knowledge-based economy are those who have specialized knowledge, the ability to make judgements, the ability to synthesize knowledge from different fields and the ability to solve problems. Thus, whoever masters the newest knowledge and applies it ingeniously will be able to wield great economic power.

Some new labor problems have arisen in the era of the knowledge-based economy, such as the acquisition of knowledge, the fair distribution of income, job security and protection of non-knowledge workers, who become an underprivileged group.

In recent years, the governments of many countries have tried the following strategies to solve these labor problems.

First, most nations have a minimum wage law that safeguards the income levels of underprivileged workers. In the era of a knowledge-based economy, however, this law fails to have its intended effect of protecting underprivileged employees because a fixed salary represents a smaller and smaller percentage of employees' total income. The minimum wage law has no influence on the level of a floating salary.

Second, employment subsidies supplement the discrepancy between an employee's normal salary and his productivity. The purpose is to help low-income workers without influencing the labor costs of their employers. These subsidies can be divided into normal ones and ones for special groups or particular industries.

Normal subsidies are those provided by the government when an employer hires someone who has been unemployed for a long time or worked in a now-defunct industry. Special subsidies are for certain declining industries and are aimed at lowering labor costs and reducing the possibility of their laying off employees or closing down. Although there are many advantages to employment subsidies, there are also quite a few disadvantages. They are not the best tool for solving labor problems in the era of a knowledge-based economy.

Third, earned income tax credit programs, which are intended to increase employees' motivation to seek employment by allowing them to earn government subsidies related to their salaries.

Fourth, work-fare plans which require anyone wishing to receive social welfare to first find employment meeting certain criteria before they can receive welfare payments.

Fifth, vocational training voucher programs provided by the government for employees who need to increase their production skills or knowledge. Employees then select the class that best fits their needs and receive training on the basis of the voucher. Tuition costs for the training class are reimbursed by the government in return for the voucher.

Each of these methods has its flaws. Our government should try the following methods to overcome these defects.

First, distribute education vouchers to low-income families to break the cycle that condemns their children to a low level of education, which leads to a lack of knowledge, which in turn leads back to low income.

Second, replace the current "basic wage" statute in the Labor Standards Law (勞基法) with a "minimum training hours statute" in order to ensure that employees' skills are up-to-date and to assist employees in making a gradual transition from manual labor to knowledge-based labor.

Third, use the Employment Security Fund (就業安定基金) to provide all workers in the labor force with vouchers for professional training, and in this way decisively raise the knowledge and skill level of the workers.