Local business groups yesterday deplored the government's decision to raise the minimum wage, saying the hike would have a big impact on their operations and hurt the nation's competitiveness.
Their reaction came after Premier Chang Chun-hsiung (張俊雄) announced yesterday that the minimum wage would go up by 9.09 percent to NT$17,280 (US$525) and the minimum hourly wage for part-time employees would be raised from NT$66 to NT$95, which came as a surprise to business groups.
"The raise is far from what we can accept," said Roscher Lin (
The association, along with five other major business groups, has held discussions with the government about the hikes and made a joint statement last month to articulate their position.
They said the hike would have a negative impact on the nation's competitiveness as companies might decide to seek cheaper labor overseas. At the time, they hoped the hike would not exceed 5 percent, while the hourly wage would start at NT$82.
The measure will benefit 2 million people working for 250,000 small-sized companies, Lin said. But employers of these companies have to budget NT$35 billion more per year for personnel, which excludes increases in employees' labor and health insurance fees following the salary increase, Lin said.
Officials at the National Association of Small and Medium Enterprises and Taiwan Chain Stores and Franchise Association (
"This is really not a good time to raise the minimum wage," said Tsai Hung-ming (
To help the companies cope with rising costs, the Ministry of Economic Affairs announced last night it would set up a service to advise companies on how to reduce operational costs.
The ministry will also allow restaurant operators to apply for the NT$20 billion government preferential loan.
State-run enterprises under the ministry should procure products from the affected companies, as well as providing venues for them to hold promotional events, it said in a statement.
CNFI's Tsai said the nation's economy was recovering, which would also help
the jobs market. But once companies — especially small enterprises that
cannot afford the extra costs — shut down their businesses or move
overseas, many workers will lose their jobs, he said.
The CNFI estimated that if the minimum wage went up 11 percent, average
profits at large enterprises would drop from 1.59 percent to 1.55 percent,
while that of small and medium sized ones would decrease for 0.47 percent to
0.75 percent.
The retail industry, which hires a large number of part-time employees, is
expected to bear the brunt of the 44 percent-hike in hourly wages.
The operational costs will certainly increase for President Chain Store Corp
(統一超商), which operates 7-Eleven, the nation's largest convenience store
chain, public relations official Amy Luan (欒美雲) said yesterday. But the
company has not decided whether it would adjust its personnel structure, she
said.
Hypermarket operators Carrefour Corp Taiwan (家樂福) and Far Eastern Geant
Co (愛買) said the measure would not influence their companies, as the
salaries they offered their employees were already higher than the adjusted
minimum wages.
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