A Ministry of Labor survey showed that of new employees who started their first job last year, the average starting monthly salary was NT$32,000 (US$1,039). That is less than the NT$33,000 salary I earned when I started working 16 years ago. Furthermore, the starting salary of about 25 percent of new employees is equal to the current minimum or basic wage.
These numbers highlight the fact that the salary level of fresh workers in Taiwan has stagnated for many years, or even been “leveled down” to the basic wage.
Taiwan’s minimum wage has been raised seven times since President Tsai Ing-wen (蔡英文) took office, for a total increase of nearly 32 percent.
However, a study by the Ministry of Labor’s Institute of Labor, Occupational Safety and Health shows that raising the minimum wage does not have much effect on raising the earnings of workers in general. It also does nothing to redress an increasingly uneven income distribution. Indeed, it has a very limited effect on raising overall salaries.
Even though the government has announced that the minimum monthly wage will increase to NT$26,400 next year, most people in Taiwan will not benefit from it because the basic wage hike will not result in a pay raise for wage earners in general.
Instead it could lead to price rises and inflation of everyday goods. As a result, it will not help to improve the quality of life for the majority of workers.
Many people mistakenly believe that raising the minimum wage is the same as raising the average wage, so most people are in favor of it.
However, raising the minimum wage only affects the salaries of workers on minimum wage in the first place, not those on higher wages.
As low-waged workers need support and protection, it is positive that the government continues to raise the minimum wage. However, the negative consequences of higher minimum wages must also be addressed.
The minimum wage is only one among a number of ways to solve the problem of low wages. The Tsai government needs to figure out how to solve the problems of high commodity prices, high inflation and the rising cost of housing.
This would require the promotion of the development of the whole economy, curbing the extent of price increases and improving the purchasing power of money.
The government should consider how best to raise the overall wage structure to keep up with the rising cost of living. This would protect the majority of workers from the a low-pay trap.
Dino Wei is an information engineer.
Translated by Julian Clegg
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