Following the government’s decision to postpone any increase in the minimum wage, the Cabinet has instructed the Council for Labor Affairs to review the current Regulations for the Deliberation of Basic Wage (基本工資審議辦法) and to look into the viability of applying a different minimum wage based on where employees live, how old they are and which industry they work in. However, the government is betraying a rather myopic approach here, with respect to whether it intends to reduce the role of the Minimum Wage Review Committee or whether it wants to introduce a tiered minimum wage system.
First, in addition to considering what constitutes a reasonable minimum wage, it is also of vital importance that any minimum wage policy uphold the principle of social partnerships throughout the entire decisionmaking process. The policy should determine the degree of any adjustment through social dialogue and in the interests of the democratic process, consensus forming and good governance. This means that the function of the Minimum Wage Review Committee goes beyond putting workers on equal footing with capitalists for negotiations.
The hope is that it will, through the ongoing negotiations, facilitate the sharing of information and exchanging of ideas to achieve balance and understanding on the respective parties’ differing views. Hopefully, this will enable labor relations to develop in the right direction.
Given this, the format generally followed at this stage of proceedings is to establish a platform for dialogue between all of the stakeholders with a view to reaching consensus.
According to International Labour Organization (ILO) statistics, the governments of nearly half the countries currently employing a minimum wage system arrived at their final decision with recommendations and opinions gained via tripartite consultation. By contrast, the Taiwanese government first overturned the minimum wage resolution and then set about trying to undermine the Minimum Wage Review Committee to reduce its influence, essentially dismantling the negotiation mechanism. Any policy forced through unilaterally by the government is sure to give rise to conflict on a weekly basis between workers and capitalists in the future.
Second, the ILO has long recommended that any minimum wage system maintain one minimum wage level for the entire workforce.
More than 60 percent of countries with a minimum wage have applied a uniform level within their borders. Only a minority have set different minimum wages according to region, industry or age. Such policies can cause problems. For example, regional differentiation of the minimum wage can lead companies to relocate to areas that have lower minimum wages and subsequently to mass internal migration of workers to other regions. The consequence of this is inter-regional tensions and a vicious circle of wage competition leading to ever-decreasing wages. Determining minimum wage by age can also lead to workers being replaced.
When times are hard, governments often view any and all labor-related mechanisms as an impediment to economic growth, and the direction in which the minimum wage issue is going at the moment is a product of skewed thinking completely at odds with developmental trends within the international community.
The government should return the power to decide the minimum wage level to the review mechanism and apply a single level across the board.
Liou You-syue is a doctoral student in the Institute of Social Welfare at National Chung Cheng University.
Translated by Paul Cooper