The Ministry of Labor yesterday proposed raising the minimum wage by 4.05 percent next year in its efforts to help workers cope with surging inflationary pressure, marking an eighth straight annual increases if it is approved by the Executive Yuan.
It would mean the minimum wage would have surged more than 38 percent since 2016.
The ministry’s proposal came after the Basic Wage Commission concluded that the minimum monthly wage should be increased to NT$27,470 next year from NT$26,400 in response to surging inflation and higher prices of life’s necessities, a ministry statement said.
The hourly minimum wage should rise to NT$183 next year from NT$176, it said.
The commission, which is composed of government officials and representatives of workers and employers, believes that employers should share a fairer proportion of economic growth with their employees, the statement said.
About 2.39 million workers would benefit from the increase, the ministry said.
The consumer price index (CPI) last month advanced 2.52 percent year-on-year, exceeding the central bank’s target of 2 percent, as summer vacations drove entertainment costs higher, while bad weather pushed up food prices, the Directorate-General of Budget, Accounting and Statistics said.
The minimum wage increase of 4.05 percent is lower than the 6 percent requested by the Taiwan Confederation of Trade Unions (全國產業總工會), but the labor association considered a 4 percent increase acceptable.
Local industrial groups yesterday said that the proposed increase greatly exceeded their expectation, as the service sector and exporters are still slowly recovering from the adverse impact of the COVID-19 pandemic over the past three years.
Local businesses are also facing pressures from soaring operating costs and dim economic prospects, General Chamber of Commerce (商業總會) president Paul Hsu (許舒博) said in a statement yesterday.
Geopolitical tensions have also pushed up costs of energy and raw materials, Hsu said.
The chamber is concerned that faster-than-expected minimum wage increases could further stoke inflation, as increased labor costs would add to the already high cost structure, Hsu added.
The Chinese National Association of Industry and Commerce (CNAIC, 工商協進會) said that higher labor costs would stoke inflation and therefore lessen the benefits of the rise in salaries.
Local businesses are facing mounting pressure to manage costs, the CNAIC said, adding that they also have to allocate extra spending on carbon emission reductions as fighting climate change becomes a trend and responsibility.
To mitigate surges in operational costs, the CNAIC suggested that the government should consider maintaining electricity rates at a meeting to be held later this month. It also suggested extending the tax breaks on imports of key raw materials.
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