The government has proposed an amendment to relax regulations governing the hiring of foreign professionals. The main purpose is to prevent a possible shortage of such talent. Oxford Economics’ Global Talent 2021 study ranked Taiwan last among the 46 nations it analyzed in terms of the expected talent deficit by 2021.
The EU, the US, Japan, South Korea and Singapore are suffering from the same problem: In China, supply and demand in equilibrium, while India was expected to have the greatest talent surplus. Most of the other nations expected to have a talent surplus are developing nations.
Taiwan’s birth rate has been declining, and not surprisingly it has been listed as one of the nations with the greatest shortage of white-collar workers. This is why the issue of how to increase their numbers has become a priority for the government.
One problem when relaxing the rules for hiring professionals is how to determine what kind of professionals are needed. The officials and legislators deciding policy cannot possibly know the needs of every individual company.
In addition, industrial development is ever-changing and in a few years or perhaps even a few quarters, the situation might have changed. Fortunately, while it might be impossible to make predictions, industry needs are reflected in wages that employees are offered. When it comes to determining the qualifications, professionals need only meet basic requirements, the rest can be managed by controlling the wage threshold. A points-based system should be used as a passive qualification requirement, but the wage threshold should be set higher than the domestic wage standard.
A points-based system should not be too rigid, because the operative environment is in constant flux and each industry has different needs, so overemphasizing educational background and experience does not facilitate the hiring of foreign professionals.
From another perspective, if the wage threshold is set too low, it would be difficult to guarantee that companies would not try to push down labor costs by using loopholes in the points-based system to fabricate a high score and create the impression that a white-collar worker is being hired when they are hiring a low-paid blue-collar worker.
A better method would be to maintain some flexibility in the points-based system while strictly controlling the wage threshold. The NT$47,971 threshold being discussed is the average monthly wage for industrial and service industry technical staff announced in 2004. It would only be reasonable to adjust this sum according to the current situation.
Why the stress on the wage threshold? First of all, the government’s policy goal is to respond to a future domestic shortage of white-collar workers, not to help businesses push down labor costs. If the wage threshold is set below current domestic wages, it would provide an incentive for businesses to use policy loopholes to bring in low-wage blue-collar workers, which would only cause the current domestic low-wage problem and unemployment to deteriorate further.
On the other hand, such low wages would be unable to attract foreign professionals and it would also force domestic talent to leave. If that happens, it would not only be impossible to solve future shortages, it would also cause further deterioration.
The low-wage trap must be avoided and the wage threshold must be higher than corresponding domestic wage standards. Following the same line of reasoning, intern wages and periods should also be regulated to prevent interns becoming full-time employees.
Taiwan will have to compete with other nations such as Japan, South Korea, Singapore, the EU and the US for foreign professionals.
If Taiwanese companies can only offer the current domestic wage standard, it will only have a limited effect and it makes it difficult to believe that companies really want to compete in the international market.
In addition, laws and government regulations ignore — and even discriminate against — the rights and interests of foreign white-collar workers. I had a coworker from Hong Kong who had to leave the nation regularly, going to Hong Kong for half a day before returning to Taiwan in order to comply with the law. This demand, which is beneficial neither to foreign professionals nor to Taiwan, must be improved.
If the wage threshold can be successfully controlled, foreign professionals that Taiwanese companies hire would be the kind of workers the nation needs. They must be treated well and as far as possible they should be given the same treatment as Taiwanese.
Simplifying the administrative procedure for moving to Taiwan and relaxing the regulations for residency and naturalization are ways in which the government can help companies. These are the only ways that the government would be able to efficiently implement policy to attract foreign professionals.
Juang Wei-torng is an associate research fellow at Academia Sinica’s Institute of Economics.
Translated by Perry Svensson
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