Service industry claims wage rise will hit hard

Staff writer, with CNA

Fri, Aug 30, 2013 - Page 4

Employers in service-related industries are concerned about a proposed increase to the minimum wage, while technology manufacturers remain relatively unfazed.

On Wednesday, the Council of Labor Affairs recommended increasing minimum wage from NT$109 per hour to NT$115 from Jan. 1 next year, while proposing that the minimum monthly wage be raised from NT$19,047 to NT$19,273, pending Cabinet approval.

In response, the nation’s two largest convenience store chains — 7-Eleven and FamilyMart — said the proposed 5.5 percent increase in the minimum hourly wage would have a huge impact on personnel costs, as hourly employees make up a large portion of their workforce.

7-Eleven estimated that its annual expenses would increase by about NT$600 million (US$20 million) if the wage increases are approved by Cabinet. FamilyMart, where 80 percent of employees are on an hourly wage, said it would also be greatly affected, but gave no exact estimate of the cost.

7-Eleven operates about 4,800 chain stores in Taiwan, while FamilyMart runs about 3,000.

Online job bank yes123 said that the proposed wage increases combined with a plan to raise electricity rates in October would hit the catering sector hard, while 1111 Job Bank, another job site, said that since salaries in Taiwan are relatively low, raising wages could attract an influx of talented workers.

A gradual and steady wage increase could benefit both businesses and workers, it said.

However, while the service sector expressed anxiety, the nation’s technology giants remained unperturbed.

Contract chipmakers Taiwan Semiconductor Manufacturing Co and United Microelectronics Corp both said that increasing the minimum wage would have little effect, as their employees are paid more than the minimum wage.