Economy

Taiwan raises minimum hourly wage

ROC Premier Sean C. Chen explains the Cabinet decision to increase minimum hourly wages Sept. 26 in Taipei City. (CNA)

• Publication Date：09/27/2012
• Source： Taiwan Today
• By  Meg Chang

Taiwan’s minimum hourly wage will increase from NT$103 (US$3.50) to NT$109 under a Council of Labor Affairs proposal approved Sept. 26 by the ROC Cabinet.

The NT$6 raise, set to take effect from the beginning of next year, comes at a time when the government is under increasing pressure to keep wages moving in line with inflation.

ROC Premier Sean C. Chen said implementing a progressive wage policy is a top priority for the central government.

“Taiwan’s working class must be looked after if it is to continue providing indispensible momentum to national economic growth. The government is fully committed to enhancing the well-being of the workers.”

But the Cabinet decided to leave the monthly rate at NT$18,780 following an increase of 5.03 percent at the beginning of the year.

“No change will be made to the monthly rate until the private sector shows further signs of recovery,” Chen said, adding that this measure balances labor rights with economic growth.

The premier said the Cabinet will consider lifting the monthly rate if either gross domestic product increases 3 percent for two consecutive quarters or unemployment drops below 4 percent for two months in a row.

Citing estimates by the Directorate-General of Budget, Accounting and Statistics, Chen said he expects the GDP condition to be met in early 2013.

Minister without Portfolio Kuan Chung-min said the decision to hold off on a monthly wage rise is based on proven economic theories and private sector studies.

“Most workers on minimum wages are employed by small and medium enterprises, which are more vulnerable to economic recession,” Kuan said. “To implement an increase now will actually harm those employees on the periphery.”

The CLA has also been instructed by the Cabinet to review its minimum wage regulations and calculation methods to better reflect Taiwan’s labor market.

This process includes setting minimum wages for different age groups, industries and regions; adopting regular salaries in calculating minimum wages; and improving the labor force survey to better measure the number of workers earning the lowest rates. (JSM)

Write to Meg Chang at sfchang@mofa.gov.tw