Premier Jiang Yi-huah (江宜樺) yesterday decided that beginning next year, the minimum wage will be contingent on growth in the consumer price index (CPI), a policy drawing severe criticism from labor groups.
With a threshold of a cumulative CPI growth of 3 percent or higher needed before the minimum wage will be reviewed, “it is highly likely that the basic wage levels will remain stagnant in the remaining three years of President Ma Ying-jeou (馬英九) tenure,” Taiwan Labor Front secretary-general Son Yu-lian (孫友聯) said.
The Executive Yuan issued a press statement yesterday saying Jiang has given the green light to the proposed rises in hourly and monthly minimum wages, along with a policy to tie adjustments to minimum wages to CPI growth, presented by the Council of Labor Affairs last month.
Under the proposal, the minimum hourly wage will be raised from NT$109 to NT$115, starting Jan. 1 next year, while the minimum monthly wage, which is now NT$19,047, will be increased to NT$19,273, effective July 1 next year.
The Executive Yuan has assessed that more than 1.76 million workers paid monthly, including 240,000 migrant workers, and more than 310,000 hourly workers will benefit from the wage adjustment.
Meanwhile, beginning next year, the council’s Minimum Wage Review Committee, which holds an annual review on minimum wages, will be held only when CPI increases by 3 percent or higher, according to the proposal.
In the press statement, the Executive Yuan said that the council’s proposal was adopted by Jiang because consensus was reached among representatives of labor groups, businesses, academics and officials at the council’s committee.
Son disputed the Executive Yuan’s claim, saying labor groups have repeatedly questioned the legitimacy of reviewing the minimum wage only after the growth rate of CPI surpasses 3 percent.
It is a violation of Article 5 of the Regulations for the Deliberation of Basic Wage (基本工資審議辦法) that “the minimum wage review committee should on principle convene in the third quarter of every year to review wages,” Son said.
The rule gives the committee flexibility about when during the year it meets to consider the minimum wage, but it prescribes that it “must convene every year” to review whether adjustments should be made to the basic salary levels, he added.
Scrapping the rule unilaterally is “detrimental to Taiwan’s employment standards” and was “aimed at pleasing conglomerates,” Son said.
Furthermore, according to Article 4 of the Regulations for the Deliberation of Basic Wage, CPI was just one of the seven elements to be factored in when the committee reviews the minimum wages, Son said.
The article stipulated that the committee must also study conditions of national economic development, wholesale price index, national income and average individual income, labor productivity of different industries and their employment situation, workers’ wages in different industries, and statistical figures on household income and expenditure, in addition to the retail price index.
The council said last month that normally, 3 percent or higher CPI growth takes two years.
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