The government’s plan to raise the minimum monthly salary for public-sector workers to NT$30,000 and to raise the minimum hourly wage shows that it is taking steps toward solving the problem of low wages.
However, more government measures are required to help high-tech companies free up the capital needed to give employees decent raises, which is crucial to solving the brain drain problem.
The pay problem has plagued the nation for many years, but it has worsened recently to the point that pundits and lawmakers alike have begun calling it a national security issue.
The label people attach to low wages makes a lot of sense, considering the exodus of talented professional the nation is facing.
According to an Organisation for Economic Co-operation and Development report, 61.1 percent of the nation’s skilled workers in 2013 chose to work overseas, and of those, about 80 percent of the high-tech industry workers went to China.
This is the result of Chinese companies luring skilled workers by offering much higher salaries than what can be earned in Taiwan, which, in the case of Tsinghua Unigroup poaching Taiwan Semiconductor Manufacturing Co’s engineers, was reportedly five times their original salaries.
This siphoning effect has not only affected top high-tech firms, but also smaller ones in technology-intensive sectors, which are losing many recent graduates who are willing to work abroad for higher salaries.
The government acknowledges that these threats could greatly destabilize the nation’s working population. It should be lauded for introducing the the Act for Industrial Innovation (產業創新條例), which grants tax deductions to investment “angels” and innovative firms that contribute capital to innovative sectors, and also lifts a regulation that required shares awarded to employees linked to technology transfers to be taxed within five years.
The government could use the act as a guideline for similar policies in other sectors — such as the biotech or artificial intelligence industries — when setting qualifications that companies must meet to receive tax breaks, thereby helping them raise the capital needed to raise wages.
While it is unlikely in the short term that the average salary in the nation’s high-tech industries could match salaries in China, these policies could help local firms narrow the gap.
Once skilled workers are able to achieve a healthy equilibrium between their income and spending, they are more likely to be content with their jobs and not feel as compelled to work overseas.
In a free market, the government cannot impose a law that punishes companies that refuse to share its surplus with employees, so it is important that profitable companies realize that employees consider their jobs to be rewarding only when their efforts are sufficiently rewarded.
As high-tech industries are at the heart of the government’s industrial upgrade initiative, such firms have a crucial role to play when it comes to combating the salary problem, as the amount they pay their skilled workers will likely have a profound effect on the results of the initiative.
The pay raise unveiled by the Executive Yuan is just one step of many needed to counter low wages, but solving the national security issue would require more than government efforts.
As Premier William Lai (賴清德) has said, despite the government’s policies to promote higher salaries, it is ultimately up to the companies themselves.
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