A remark by President Tsai Ing-wen (蔡英文) on Monday that the government hopes to continue raising the nation’s monthly minimum wage every year drew mixed reactions from labor unions and trade groups yesterday, from expectations about a steeper increase next year to concerns over adverse effects on businesses already affected by COVID-19 restrictions.
Taiwan Labour Front secretary-general Son Yu-liam (孫友聯) said he welcomed Tsai’s announcement and expected that a wage hike next year would be larger than the increase this year, the state-run Central News Agency (CNA) quoted Son as saying.
This year, the monthly minimum wage was raised by 5.21 percent from NT$24,000 to NT$25,250 (US$813 to US$856), and the hourly minimum wage lifted from NT$160 to NT$168, with 2.45 million workers estimated to benefit from the increases, the Ministry of Labor said.
Photo: CNA
Son said that since Tsai took office in 2016, the government has raised the minimum wage every year for six consecutive years.
As the nation’s GDP has maintained steady growth over the past six years, so the government’s actions prove that those who regard wage increases as harmful to the economy are wrong, he said.
For many workers, this is also their only chance to receive a raise, he said.
During her speech at the annual assembly of the Taiwan Confederation of Trade Unions, Tsai said that the government plans to raise the minimum wage every year and is determined to overcome every obstacle to carry out the goal.
However, Tsai said that small and medium-sized enterprises (SMEs) have been hurt by a surge in COVID-19 cases in the past few months, which could make absorbing a minimum wage hike in the coming year difficult for them.
The government would provide assistance to smaller businesses to help them overcome any obstacles they encounter, she said.
Chiang Chien-hsin (江健興), who heads the confederation of unions, said he hoped the government would continue raising the minimum wage to keep paychecks from being eroded by rising inflation.
Lawmakers should pass a formal minimum wage bill as soon as possible to set up a mechanism for annual wage hikes, Chiang said.
However, the National Association of Small and Medium Enterprises (中小企業協會) and the General Chamber of Commerce (全國商總) expressed concerns about a continued increase in the minimum wage next year, saying that while some sectors might have weathered the impact of COVID-19 this year, others have not fared so well.
Association chairman Lee Yu-chia (李育家) said that while semiconductor firms and shipping companies have posted robust sales, some SMEs have been badly hit by the pandemic and are unable to offer higher wages.
The government should provide support to businesses that cannot afford a hike in the minimum wage, such as through tax reductions and delayed payments, Lee said.
General Chamber of Commerce chairman Paul Hsu (許舒博) said any plan to increase the minimum wage must take the situation in different industries into account, with appropriate subsidies for affected businesses, such as those in the services industry.
Otherwise, firms would resort to layoffs or cutting working hours to reduce costs if their business has not been good this year, especially in the service sector, where the pandemic has had a huge impact, Hsu said.
The ministry’s Minimum Wage Review Committee, which comprises government officials and representatives of unions and the private sector, as well as academics, is required to meet in the third quarter of every year to discuss wage adjustments for the next year.
Additional reporting by CNA
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