Amid high expectations from all sides, the Council of Labor Affairs yesterday announced a 3.5 percent increase in the minimum wage to NT$17,880 (US$560) per month, a move that failed to satisfy labor organizations and the business sector.
Following the adjustment, the minimum monthly wage would increase by NT$600, while the minimum hourly wage, currently at NT$95 per hour, will go up NT$3. The new wages will take effect on Jan. 1 next year, subject to Cabinet approval.
The announcement came after more than three hours of negotiations among 21 committee members and council Minister Jennifer Wang (王如玄), who was committee chairperson.
Although Wang chaired the meeting, the council said she acted only as a facilitator and remained neutral on whether to raise the minimum wage.
The composition of this year’s committee had less government officials than in previous years. One-third of the committee was made up of labor representatives and one-third came from the business sector.
The council said about 1.11 million domestic workers, 187,000 industrial foreign workers and 280,000 part-time workers would benefit from the increase.
The last time the minimum wage was raised was in 2007, increasing from NT$15,840 — in place since 1997 — to NT$17,280.
“Most committee members agreed that the minimum wage had to be raised,” Wang said. “We looked at the increase in the consumer price index [CPI], which rose 2.67 percent from 2007 through 2009 and 4.47 percent from 2006 to 2007,” she said.
Aside from CPI levels, the council said the committee also took into consideration factors such as GDP growth and unemployment.
Labor groups, which had called for a minimum wage of NT$22,115, said they were unhappy with the outcome, which they said would only widen income disparity in Taiwan.
“This minor adjustment is unacceptable,” Taiwan Confederation of Trade Unions (TCTU, 全國產業總工會) secretary-general Hsieh Chuang-chih (謝創智) said. “The adjustment does not take into account that the minimum wage has remained too low for the past 10 years.”
The TCTU said a minimum wage of NT$22,115 was the lowest possible wage for a worker and the worker’s family to maintain a dignified lifestyle. Labor groups arrived at this number by calculating factors including the amount an average person spends per month and the average number of dependents for each worker.
Hsieh said labor groups would now turn their focus on the Executive Yuan.
Taiwan Labor Front (台灣勞工陣線) secretary-general Son Yu-lian (孫友聯) said the government had sided with business conglomerates all along, which was made evident when it signed the Economic Cooperation Framework Agreement (ECFA) with China and gave multiple subsidies and grants to companies to conduct research and development, as well as investment.
“The small rise is a total concession to the chaebols,” Son said, referring to the gigantic business conglomerates in South Korea.
For their part, business groups, which had hoped for a freeze on the minimum wage, said 3.5 percent was “too much.”
“This is not a good time to talk about raising wages,” said Wang Ying-chieh (王應傑), convener and spokesman for the General Chamber of Commerce. “Businesses are still facing mixed signals about the state of the global economy.”
Wang said the move could result in cutbacks in hiring and higher unemployment. In the end, this would harm workers rather than benefit them, he said.