Tim­ing of pro­posed min­i­mum wage hike vi­tal: Deng

The China Post - - LOCAL -

Eco­nomic Af­fairs Min­is­ter John Deng ( ) did not re­ject on Wed­nes­day a pro­posal by la­bor author­i­ties to raise the min­i­mum wage but said busi­ness in­ter­ests were con­cerned about the tim­ing of such a plan.

The Min­istry of La­bor is re­port­edly pre­par­ing to raise the min­i­mum wage by 1.5 per­cent, but the idea drew strong op­po­si­tion from rep­re­sen­ta­tives of Tai­wan’s six big­gest busi­ness as­so­ci­a­tions in a meet­ing with Deng on Tues­day.

Asked about the is­sue Wed­nes­day, Deng said the busi­ness groups were not to­tally op­posed to rais­ing wages in an ap­pro­pri­ate man­ner, but they in­sisted that the “tim­ing is very im­por­tant.”

“Many ob­jec­tive eco­nomic in­di­ca­tors such as the con­sumer price in­dex (CPI) and the un­em­ploy­ment rate have to be taken into con­sid­er­a­tion when plan­ning to raise the min­i­mum wage,” Deng cited the busi­ness groups as say­ing.

The groups urged the gov­ern­ment to look at a broad range of num­bers when as­sess­ing a wage hike rather than sim­ply pick­ing and choos­ing spe­cific num­bers, Deng said.

More In­di­ca­tors to Be Taken

into Con­sid­er­a­tion: Deng

“In the CPI for ex­am­ple, we can’t just look at food prices. The prices of food, cloth­ing, hous­ing and trans­porta­tion must all be con­sid­ered so that the pol­icy adopted will be more com­plete and win the sup­port of more peo­ple,” Deng said.

En­ter­prises gen­er­ally un­der­stand that their em­ploy­ees are valu­able as­sets and are will­ing to share their prof­its with them, Deng said, but “they are very con­cerned about when wages would be ad­justed and if the changes would ben­e­fit their work­ers or only ben­e­fit other groups.”

The busi­ness lead­ers noted that their work­ers earn more than the min­i­mum wage and there­fore would not ben­e­fit from a min­i­mum wage hike, Deng said.

The min­is­ter said the

busi- ness com­mu­nity’s views would be re­ported to the Cab­i­net for its ref­er­ence, along with in­fla­tion and un­em­ploy­ment data and eco­nomic growth pro­jec­tions.

“The Min­istry of Eco­nomic Af­fairs is ob­li­gated to make known the voice of the busi­ness sec­tor,” Deng said.

Big Bosses Crit­i­cize Tim­ing of Wage Hike

Ac­cord­ing to the Eco­nomic Daily News, Chi­nese Na­tional Fed­er­a­tion of In­dus­tries Chair­man Rock Hsu ( ) crit­i­cized a min­i­mum wage hike at this time as ir­ra­tional given the cur­rent eco­nomic slow­down and said it would harm Tai­wan’s small and medium-sized en­ter­prises.

Hsu cited Tai­wan’s de­clin­ing ex­ports and their ad­verse ef­fects on earn­ings as fac­tors that sug­gest now is not the right time for a min­i­mum wage ad­just­ment.

Gen­eral Cham­ber of Com­merce Chair­man Lai Cheng- i ( ) sus­pected that the plan to raise wages was sim­ply de­signed to so­licit votes in next Jan­uary’s leg­isla­tive and pres­i­den­tial elec­tions and said busi­ness and in­dus­trial groups would op­pose it to the end.

If the wage hike pro­posal is car­ried out, it will be the sixth year in a row that the min­i­mum wage has been ad­justed higher.

Re­cent Wage Hike

The min­i­mum wage was most re­cently in­creased on July 1 when it was raised by 3.81 per­cent to NT$20,008 (US$632). The min­i­mum hourly wage was also in­creased to NT$120.

Cit­ing gov­ern­ment sources, the Eco­nomic Daily News said that in propos­ing a hike in the min­i­mum wage, the Min­istry of La­bor’s wage re­view com­mit­tee con­sid­ered GDP growth from the third quar­ter of last year to the sec­ond quar­ter this year — 4.32 per­cent, 3.42 per­cent, 3.37 per­cent and 0.64 per­cent — as a ref­er­ence.

GDP growth was 2.95 per­cent over that pe­riod, and em­ploy­ers and em­ploy­ees con­trib­uted equally to the gains, the sources said.

On the other hand, a 0.65 per­cent year-on-year de­cline in the con­sumer price in­dex in the first seven months of the year may have given the La­bor Min­istry pause in con­sid­er­ing a min­i­mum wage hike.

The min­istry, how­ever, also gave some weight in com­ing up with its plan to a 1.95 per­cent year-on-year rise in the price of a bas­ket of 17 house­hold ne­ces­si­ties in the first five months of the year, the re­port said.

The bas­ket in­cludes such items as rice, pork, bread, eggs, sugar, cook­ing oil, sham­poo and toi­let pa­per.


Pres­i­dent Ma Ying-jeou ( ), right, speaks to board mem­bers of the Chi­nese Na­tional Fed­er­a­tion of In­dus­tries (

) in the Pres­i­den­tial Of­fice, yesterday.

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