Thu, Jun 01, 2006 - Page 8 News List

It's time to reform the minimum wage policy

By William Kao 高為邦

On May 10, the Industrial Development and Investment Center under the Ministry of Economic Affairs invited 11 agencies to discuss ways to assist Taiwanese businesspeople operating in China -- to protect their rights and interests there, as well as strengthen the propaganda regarding the suffering of other Taiwanese investors and offer preferential conditions to attract them back to Taiwan.

When it comes to offering preferential conditions, the Council of Labor Affairs has, based on government policy, always believed that wages for local and foreign laborers should be based on the same standard, lest Taiwan's image abroad be damaged and to avoid violating the rules stipulated by the WTO and the International Labour Organization (ILO).

So, canceling the minimum wage is something that all academics and experts of the administrative team see as mission impossible.

Is the minimum wage unshakable? While it is difficult to answer this question with any certainty, it is safe to say that the policy deprives mentally and physically challenged people of job opportunities, and puts a limit on the capacity of the old, the weak, women and youths to enter the workforce. Since employers only want experienced and competitive employees, no company is willing to train newcomers, or take good care of the disadvantaged.

As a result, many companies are unable to find workers, and many workers are unable to find jobs. The purpose of stipulating a minimum wage is to protect laborers' ability to cover their most basic living needs. But if the policy is too rigid, it may force enterprises to shut down or leave Taiwan, throwing even more people out of work, while failing to fulfill the original purpose of protecting the work force. Shouldn't such a policy be reviewed?

Recently, the International Institute for Management Development (IMD) in Lausanne, Switzerland published its latest World Competitiveness Yearbook, ranking the US, Singapore, and Hong Kong as the world's most competitive economies, in that order. Taiwan declined from 11th spot the previous year to 18th, just ahead of China.

Neither Singapore nor Hong Kong have set a minimum wage. Is this one indirect reason behind Taiwan's decline? I don't know. But it is a fact that many Taiwanese factories are unable to recruit enough labor, and it is also a fact that Taiwan's export surplus has significantly decreased and its unemployment rate has persistently increased. Shouldn't the government review its policy not to differentiate wages for local and foreign workers?

Another statistic is more shocking: Taiwan's birth rate marked a new low of 0.91 percent last year. The figure is higher than only Germany's rate, at 0.85 percent, but lower than that of Japan, Britain and France, which recorded rates of 1.29 percent, 1.27 percent, and 1.2 percent, respectively.

Today, one-seventh of Taiwan's babies are born of foreign women married to Taiwanese men. Without the high birth rate of 13 percent among our foreign brides, the nation's birth rate would drop drastically to 0.78 percent, the lowest in the world.

It's not that Taiwan's young adults have high average annual incomes and care only for pleasure, and so are refusing to have children. Rather, they are afraid of getting married, since it's hard to find and hold a job. Even if they get married, the uncertain future means they remain afraid of having children. We all know this situation very well. Must we really hold sacred the minimum-wage policy?

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