The Ministry of Labor’s Minimum Wage Deliberation Committee is scheduled to meet on Friday next week to discuss whether the minimum wage would be raised next year. The annual meeting, mandated by the Minimum Wage Act (最低工資法), has become one of the most consequential mechanisms for ensuring that wage growth reflects broader economic conditions.
The act requires the committee to consider various indicators — primarily changes in the consumer price index (CPI) and GDP. By those standards, a minimum wage increase seems likely.
Despite global economic uncertainty, GDP growth has exceeded expectations this year, with Cathay Financial Holding Co this week raising its forecast to 4.5 percent. The CPI has remained relatively stable at between 1.5 and 2 percent so far, although food prices rose sharply during several months this year.
Rising prices place the greatest strain on Taiwan’s most vulnerable — low-income people who spend a disproportionate share of their earnings on necessities such as food, transportation and housing. The Minimum Wage Act was designed to ensure these groups are not excluded from the benefits of economic growth.
The law is functioning as designed, but whether it is achieving its intended effect is another question.
Taiwan’s minimum monthly wage — currently NT$28,590 — remains insufficient to meet the cost of living in much of the country. While the number of workers earning less than NT$30,000 has fallen to a record low, nearly 20 percent of the workforce still falls into that bracket.
The most recent wage increase benefited 2.57 million workers, including hundreds of thousands of migrant workers — but it did not guarantee financial security.
Inflation in Taiwan is moderate by global standards, but it is still high enough to erode wage growth. Early last year, average monthly pay rose by 2.25 percent, but inflation erased those gains, resulting in a real wage decline of 0.09 percent. Each minimum wage increase brings concerns that higher wages would lead to increased prices. A recent survey found that more than 94 percent of employees worry that inflation would shift the burden onto consumers.
These concerns are not unfounded, but they must be weighed against the alternative — a working population buckling under the pressure of increasingly unaffordable living costs.
Long-standing increases in housing prices have pushed home ownership out of reach for many young workers, increased mortgage burdens and are now driving up rent costs. The rental market remains largely unregulated, leaving tenants vulnerable to sudden price hikes, while rising utility costs add to the strain.
Meanwhile, food price volatility driven by typhoons and supply disruptions frequently causes sharp spikes in essentials such as vegetables, fruit, meat and eggs. Restaurants and retailers then pass these increased costs onto consumers, furthering financial pressure — especially on low-income households.
This widening gap between earnings and the cost of living is already taking a demographic toll. A recent Ministry of Health and Welfare survey found that nearly 46 percent of women aged between 15 and 24 do not want children, with more than 60 percent citing financial pressure as the main reason.
Taiwan is poised to surpass South Korea in GDP per capita for the first time in more than two decades — a symbolic milestone that should signal real progress in quality of life, not just for high earners, but for the many — particularly younger generations — who remain disillusioned and feel left behind.
Raising the minimum wage by a small margin each year might appear responsible and measured, but it is deeply conservative at a time that calls for bolder action. It is only the first step of many.
If the government is serious about building an economy that works for everyone, it must ask harder questions about what meaningful wage reform looks like, and how to close the gap between economic indicators and the real, everyday struggles of working people.
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