Timing of proposed minimum wage hike vital: Deng
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.