Since the amendment of the Labor Standards Act (勞動基準法), which stipulates a five-day workweek with “one fixed day off and one flexible rest day,” many business owners have criticized the government for the policy’s impact on the nation’s industries.
However, despite the possibility of it sparking a chain reaction in industry which could carry increased social costs, the amendment could help drive Taiwan’s industrial transformation, provided that the government can hash out a more comprehensive plan with enough supporting policies. Unfortunately, the implementation of the policy has been rash, with a lack of strategic thinking and complementary economic and labor measures.
A positive change brought by the new scheme is the increase in overtime pay, which in theory should help eliminate problems of high workload and low pay by ensuring that employees either receive more pay for working overtime or work shorter hours due to increased personnel costs.
Nevertheless, the new regulations have several negative effects. For example, to avoid paying overtime, companies might hire more part-time employees, and companies might transfer the increased personnel costs onto consumers, while businesses lacking a good financial foundation might cut staff or even have to close down. In addition, those working in the knowledge economy are likely to receive more overtime pay than those working manual labor, which could emphasize the nation’s M-shaped society.
Unfortunately, none of these problems were addressed by President Tsai Ing-wen’s (蔡英文) administration preceding the change, a sign that the government had not carefully considered the possible consequences before railroading the bill through the legislature. If the government had been more cautious, it could have reduced the impact of the new regulations on businesses and even taken the opportunity to introduce measures to promote an industrial upgrade. By improving workers’ rights, the government can help eliminate low-quality businesses and workers could then transfer into other industries.
Sweden, a country widely applauded for its exemplary labor policies, successfully upgraded its industry in the late 1940s by raising wages for manual workers, which forced ineffective businesses to close down. The policy helped promote an industrial upgrade and solved the problem of businesses that had no room for development and were struggling to survive. This shows that pay raises are about more than just improving workers’ rights and can boost industry.
The Swedish government also supported training programs, hired many workers itself and set down a comprehensive plan for industrial upgrades after reaching an agreement with industry. Considering both workers’ rights and economic productivity helped harmonize the nation’s social and economic goals.
Instead of drawing a comprehensive plan that considers the different aspects involved, as the Swedish government did, Tsai’s administration failed to take an overall strategic approach and did not initiate a cross-departmental discussion about economic and labor issues, with the result that wages, job training, consumer prices and economic policies became fragmented. The unfortunate outcome means that what should have been a progressive law to promote workers’ rights is incapable of having the desired effect.
Chen Chia-lin is the deputy director of the Taiwan Solidarity Union’s Publicity Department and has a doctorate in law.
Translated by Tu Yu-an
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