Taiwan’s stock market is marching to ever-greater heights, with the shining stars of artificial intelligence (AI), semiconductors and high-powered computing lighting the way.
The question of when the TAIEX will break 50,000 points is on everybody’s minds, and the media seem to report new record highs in tech stocks every other day.
However, at the same time, traditional industries are under growing pressure, with a string of factory closures in the past few months. In May, Bridgestone Taiwan Co announced the closure of its Hsinchu plant, affecting more than 550 workers; Taiwan Shiseido Co has also said it would close its Hsinchu-based factory next year.
Meanwhile, what began as a temporary shutdown of Taiwan Prosperity Chemical Corp’s (TPCC) manufacturing plant in Kaohsiung’s Linyuan District (林園) has become a full-fledged closure that is expected to affect upward of 100 workers.
A local textiles company called Hsin Sin with more than 45 years of history last year announced that it was shutting down operations under the pressure of long-term deficits, resulting in about 90 layoffs.
They are not isolated incidents; this is the freezing over of Taiwan’s traditional industries.
In the aftermath of the COVID-19 pandemic, weak demand, global inflation, rising energy costs and a flood of low-priced Chinese imports have left many of Taiwan’s traditional industries struggling to stay afloat.
Yet even as businesses continue to shut down factories, lay off workers or mandate unpaid leave, the Ministry of Labor remains determined to push ahead with its “zero-fee” policy, which shifts the recruitment and brokerage fees for foreign migrant workers onto Taiwanese employers.
Is now the right time for the Ministry of Labor to increase business overheads?
Those in the firing line are not Taiwan Semiconductor Manufacturing Co or AI technology companies, but traditional manufacturers up against a rising tide of increasing costs.
When businesses are already struggling with shrinking markets and declining revenues, what would happen if the cost of hiring migrant workers pushes things even further?
The likely outcome is more companies downsizing, more layoffs and closures, and more relocations overseas.
It would mean not just migrants losing their jobs, but Taiwanese workers, too.
I am in full support of reforms for wherever the government believes the brokerage system needs fixing. However, this should not come at the expense of Taiwanese businesses in asking those already struggling in traditional industries to shoulder further financial burdens.
The government must answer some fundamental questions:
First, has it completed a comprehensive assessment of how the zero-fee policy for migrant workers would affect business costs and the labor market?
Second, has it evaluated whether this policy could accelerate factory closures and encourage overseas relocation?
Third, if it results in higher unemployment, how will the ministry take responsibility?
Public policy cannot be guided by ideals alone; it must also reflect economic reality.
With factories shutting their doors one after another, any government policy that raises business costs risks harming not only individual companies, but Taiwan’s wider employment market.
Is the ministry truly willing to force even more companies down the same path as Bridgestone, Shiseido and TPCC?
Huang Kao-chieh is the honorary chairman of the National Federation of Employment Service Association.
Translated by Gilda Knox Streader
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