Raising the minimum wage in Taiwan does not seem to have improved income stagnation and low wages over the past two decades. The average wage edged up 3.02 percent annually to NT$670,000 last year, although a record 68 percent of the nation’s 8.13 million workers earned less than that, data released last week by the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed.
The median annual wage was almost unchanged, increasing just 1 percent year-on-year to NT$506,000 last year, which means that half of the nation’s workforce earned less than that. The median wage is the midpoint between the amount earned by the lowest-paid 50 percent and the highest-paid 50 percent of workers.
It is worth noting that the medium annual wage has lagged behind average wage hikes, indicating that the disparity between the highest-income earners and those being paid the least is increasing. That means lower-paid workers’ salaries did not increase, while those with higher salaries benefited the most from the wage hikes. That is why most people are indifferent when it comes to salary hikes.
Following six hikes from NT$20,008 in 2016, the minimum wage climbed 26.2 percent to NT$25,250 per month last year. From Sunday, it is to rise 4.56 percent year-on-year to NT$26,400 per month, one step closer to President Tsai Ing-wen’s (蔡英文) goal of NT$30,000. The hourly minimum wage is to increase 46 percent from NT$120 in 2016 to NT$176 next year.
The Tsai administration is pushing for the passage of a bill that would provide a legal base for the government to regularly raise the minimum wage, rather than through a cross-ministerial review as it does now. The government wants low-paid workers to sustain a basic lifestyle by earning a livable minimum wage.
More than three years after the idea was first pitched, the Executive Yuan has yet to send its bill to the Legislative Yuan for discussions, citing differences between labor groups and local businesses. Labor groups seem unclear about whether the minimum wage hikes would automatically result in an increase in regular wages. They have repeatedly called on the government to be more proactive in enacting the minimum wage hikes.
Hikes to the minimum wage do not benefit part-time workers such as students and elderly workers, or those with a lower monthly salary such as migrant workers and caregivers. The DGBAS estimated that about 85 percent of the overall workforce would not directly benefit from the minimum wage increases.
A survey released last week by Cathay Financial Holding Co showed that people have a bearish salary outlook for next year, as 58.5 percent of respondents expected no increase to their regular wages — 9 percentage points higher than last year. About 8.8 percent expected their wages to drop next year, up from the 6.2 percent of respondents who said so last year.
As the economy is facing headwinds next year, it is not easy to find a quick fix to income stagnation and the widening income gap. The government must come up with longer-term plans to improve the situation, and at the very least, enable more people to earn enough to keep the wolf from the door.
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