This year, about 250,000 overseas contract workers
are in Taiwan. They have greatly alleviated Taiwan's
serious manpower shortages in the manufacturing and
construction industries; however, they have also
brought certain social problems to Taiwan. What are
the conflicts? What has been done to solve them?
A Sunday afternoon, and 40-year-old Jenny Feliciano is listening carefully to her friends' suggestions in a corner of the Taipei Railway Station. Six months ago, Jenny came to Taiwan from the Philippines to work as a domestic helper. Before she came here, she borrowed large sums of money at home to pay expenses, the largest of which was the broker fee to the manpower agency that had found the job for her in Taiwan. Recently, she has had serious disputes with her employer, and she is afraid she will be sent back to the Philippines. If that happens, she will probably be deeply in debt for the rest of her life. Summer sunlight is bright behind her back, but her face is clouded. A few feet away, groups of Filipinos and Filipinas laugh and talk happily, enjoying their precious holiday; however, Jenny is quiet. Thinking about her uncertain future, Jenny just cannot cheer up.
For years, workers like Jenny from the Philippines, Thailand and Indonesia have been recruited in large numbers to work here under labor contracts for up to three years. This year, there are 250,000 overseas contract workers (OCWs) in Taiwan. They have made significant contributions to Taiwan's economic development; however, since their arrival, complaints from both the OCWs and the local people are often heard.
What are their complaints? One of the most frequent complaints voiced by the OCWs is the increasingly high broker fee. "The broker fee really increased fast," says Flora Chang (張耿榮), managing director of Summit Trading & General Services, a broker company. "A few months ago, according to our research, some of the brokers charged NT$100,000 (US$2,899), and recently, I have heard that the fee has reached NT$160,000 (US$4,638). That means before a worker comes to Taiwan, he must first pay so much money to the brokers in Taiwan and in the home country." That is really too big a burden for many foreign workers. Some of them have to borrow money to pay the broker fee and earn money here to repay their debts at home.
"To most of the foreign workers, the first year's income is almost totally used to clear their debts. That means they will have no income for one year. They can start to earn money only during the second year. What will happen to their families who need their economic support?" asks Mario R. Antonio, welfare officer of the Labor Center of Manila Economic and Cultural Office (MECO) in Taipei.
Another type of complaint from foreign workers relates to disagreements with their employers. Jenny and some of her friends complain that their employers do not follow the terms of the contracts. They are often asked to do extra work outside the scope of their contracts. These burdens most often fall on domestic helpers and caregivers.
Currently, there is a shortage of local domestic helpers and caregivers, occupations which are now seen as monotonous and tiresome. In addition, there are not many geriatric or medical facilities for the chronically ill and bed-ridden. According to Taiwan's regulations, families that are unable to find proper nursing facilities or local caregivers and need help in caring for comatose relatives, the severely handicapped and paralytics, may apply to employ a caregiver from overseas. In addition, if both husband and wife work and have a dependent under six or over seventy years of age, they may apply to employ a foreign domestic helper. This regulation clearly indicates that the position of domestic helper and caregiver are quite different; however, many caregivers are asked by their employers to do the additional work of domestic helpers.
"There is no difference between caregiver and domestic helper anymore. Although we do not know the exact number, we do know that some of them are even asked to work at their employers' factories," says Mario R. Antonio.
On the other hand, local workers, particularly Taiwan's indigenous people, accuse OCWs of stealing their jobs in high -paying sectors such as construction and manufacturing. For example, workers are brought in for major construction projects at low pay rates, driving down wages for local blue-collar workers. According to statistics from the Council of Aboriginal Affairs, Executive Yuan, in 1997, the unemployment rate for local indigenous people was 4.7 percent, which is about two times higher than that of non-indigenous local residents. With many indigenous people out of work, they have staged sit-in demonstrations, protesting that OCWs have jeopardized their work opportunities.
"Although there is nothing to prove that the unemployment rate among the indigenous peoples is directly related to the foreign workers, I believe that the introduction of OCWs is one of the reasons," says Ma Kai (馬凱), research fellow at Chunghua Institute for Economic Research (CIER). "Most of the indigenous people here are doing physical labor, and foreign workers, who are paid much lower salaries for the same jobs, will certainly affect the others' employment opportunities."
In addition to the protests of indigenous people, Taiwan's employers have their complaints. Some complain that their employees abuse their children or ill and elderly parents. On August 16, a woman wrote to the local English-language newspaper China News complaining that the caregiver she had hired to attend her 80-year-old mother-in-law kicked and threw things at the elderly woman whenever the latter refused to obey the caregiver's instructions.
Another complaint is that foreign workers do not work efficiently. According to James C. Hu (胡嘉遜), managing director of the Central Human Resource & Management Company, the production efficiency of some foreign workers is only one-third that of local workers.
With the growing seriousness of the conflicts between foreign workers and local people, the public and private sectors have sensed the urgency of solving these problems. Many meetings and seminars have been held to discuss these problems. At the top of the list is the high broker fee.
"Our workers have already suffered too much. Our workers have already complained a lot. This is the time for us to help them," says MECO's Antonio. To help its workers, the Philippine government has continuously urged Taiwan to solve this problem. Many suggestions have been made; however, it is a thorny issue because high broker fees are the result of many complicated factors. There are three major reasons broker fees are so high. First, there is an imbalance between demand and supply. Second, some brokers pay kickbacks to the employers or their representatives in order to win contracts for the supply of OCWs. Third, the brokers need to make enough money to cover their expenses, expected profits, and the risks involved with changing government employment quotas.
High salaries and stable work have made Taiwan one of the most popular workplaces for people from some southeast Asian nations. Minimum-wage laws set the minimum income for foreign workers here at NT$15,840 (US$455) per month, which is one of the highest among the Asian nations. "We are greatly envied by our relatives and friends because, by working here, we can earn about four times the salary that we can at home," says Chanyui Loonsungyang, a construction worker from Thailand. However, due to Taiwan's foreign labor policy, the quota for foreign workers is limited.
"Our foreign labor policy is one of supplementation instead of substitution," says Lin Tsong-ming (林聰明), director general of the Employment and Vocational Training Administration (EVTA), Council of Labor Affairs. "The introduction of overseas contract workers into the labor market is designed to meet urgent needs in the manufacturing and construction industries. The labor market is certainly not wide open to foreign workers, and most of the jobs are reserved for local residents. This policy is based on four principles: to protect the job opportunities of local people, to prevent foreign workers from becoming legal citizens of Taiwan, to prevent foreign workers from affecting the social order, and to prevent them from becoming a hindrance to the modernization of local industry." Under conditions where employment of OCWs is thus limited, the competition for jobs becomes very intense.
"Whenever there is a job vacancy here, there will be 500 to 1000 people from several of the southeast Asian nations competing for it," says Lin. With such fierce competition, who will be the lucky one to get the job? If one has no special skill, money will perhaps be the most important criterion.
Since the quotas are low, the employers who have received permission to recruit foreign workers have become a dominant power in this circle. Before, many broker companies offered these employers free air tickets or some expensive gifts in order to win their business. Recently, they began giving the employers kickbacks.
"More than ninety percent of the employers will ask for kickbacks. And some employers can get NT$50,000 [US$1,449] to NT$60,000 [US$1,739] in kickbacks for each foreign worker. On top of that, because the quotas are subject to change, our costs are increased. For example, the Council of Labor Affairs originally planned to set a quota of 38,000 foreign workers last year in May; however, after Chan Hou-sheng [詹火生] took over as the new director-general of CLA, this quota has somehow disappeared. No quota means no business for brokers. That is also one of the reasons that the broker fee has to be higher," says broker Flora Chang.
To solve this problem, Taiwan's government has not only held many seminars to communicate and educate brokers, but also tried to adopt a plan to directly recruit foreign workers itself. This model is called "Direct Employment of Foreign Workers Through Nations," and envisions government-to-government recruitment of workers to avoid the intervention of brokers. However, this method has been criticized as a mission-impossible.
"How can the government recruit foreign workers by itself? The government needs more manpower to do that; however, since the current trend is to downsize the government, I wonder whether the government will be able to employ more people to handle these affairs. Besides, the government's efficiency has long been questioned. Will these governmental employees be efficient enough to meet the demand? If the government becomes a 'superbroker,' 2,000 to 3,000 brokers will lose their jobs. What will happen to them?" Ma Kai of CIER says. Perhaps due to these problems, this model has yet to be adopted, after languishing for several years on the drawing board.
The government seems to be more optimistic about its efforts to solve the unemployment problems among the indigenous peoples. "To encourage the private sector to employ the indigenous people, we offer a monthly subsidy of NT$5,000 (US$145) to private companies for each one they employ, and we have opened many training classes for indigenous people. In fiscal 1998, we trained 1199 indigenous people, and, to encourage them to participate in such training classes, we also gave each person a monthly subsidy of NT$10,000 (US$290). Recently, we drafted a paper, 'Measures to Improve the Employment of Taiwan's Indigenous Peoples' to help solve their unemployment problems. Under this plan, we will not only offer subsidies to them and their employers, but we will also subsidize the brokers who succeed in introducing indigenous workers to factory workplaces for three consecutive months," says EVTA's Lin. "We will do our best to help. Through these measures, I think more indigenous people will obtain employment opportunities."
Some notable achievements in improving the relationships between employers and employees have been made through the joint efforts of the public and private sectors. Since certain disputes between employers and employees arise from cultural differences and inadequate awareness of laws, the Taiwan Provincial Police Administration has produced a videotape that
features Taiwan life, customs and laws to help foreign workers adapt to life on the island. Also, the government has held many meetings to educate employers about the laws relating to the foreign workers. If employers violate regulations, they will be subject to penalties and their permits to recruit foreign workers will be revoked.
But the most successful method of improving poor relations is the establishment of foreign worker management centers. These centers are designed and constructed by professional companies, based on the needs of the foreign worker. For example, Central Human Resources & Management has long helped many employers design and construct such centers. One of these centers near Da An Park has facilities and equipment designed to mirror those in the workers' home countries. Thai chefs are employed, and entertainment such as cable TV with Thai programs is offered. OCWs here seem to be pleased with the environment.
"Our employer cares about us and treats us well. We are offered a good environment for work and rest. When we get sick, there are people to take care of us. When we have problems, there are people to help us," says Wuttichai Yana, a 35-year-old construction worker from Thailand. "Understanding, care and help are essentials in managing these workers. By combining modern personnel management techniques with scientific methods of worker productivity, company-owners can raise the efficiency of foreign workers to more than eighty percent that of local workers. Through professional management skills, all the disagreements between employers and employees will soon be solved," says Central Human Resources & Management's James C. Hu.
The introduction of foreign workers has generated some problems, and, to solve them, society must spend time and effort, which will increase the cost of employing foreign workers. However, OCW employment is considered a necessary policy for Taiwan's economic development. Why does Taiwan need to recruit these foreign workers?
Since the 1980s, increased incomes and higher levels of education have encouraged more and more local people to work in the service industry rather than in manufacturing or construction industries--the latter usually considered not only physically demanding, but also dirty and dangerous. As a result, there was a labor shortage, and many public construction projects could not be completed on schedule. In 1989, the Executive Yuan authorized the recruitment of foreign workers to help with the construction of some public projects.
The labor shortage was not limited to construction, but spilled over into the manufacturing industries as well, and many companies transferred their factories to foreign countries where they could employ laborers at cheaper wages. To stanch the outflow of manufacturing capital, the Executive Yuan in September 1991 allowed selected manufacturing and construction industries to hire foreign workers, when sufficient workers could not be found locally. Technically, before the system of recruiting foreign laborers was given a legal basis under the Employment Services Act in 1992, any such foreign worker in Taiwan was working "illegally."
For the last several years, these foreign workers have helped to solve problems arising from labor shortages. "Foreign workers have helped to complete many public construction projects. They have also helped to alleviate Taiwan's serious manpower shortages in the manufacturing and construction industries," says the EVTA's Lin Tsong-ming. Lin's comments are supported by statistics and research from the Directorate General of Budget, Accounting & Statistics, as well as the Council of Economic Planning and Development (CEPD).
According to the statistics, the labor shortage rate was 10.33 percent for the manufacturing industry and 9.5 percent for the construction industry in 1989. These figures were reduced to 4.05 percent and 3.13 percent, respectively, by May 1998. A report prepared by the CEPD stated that the labor shortage was one of the reasons for the delay of public construction projects in 1994; however, the labor shortage is no longer one of the reasons in 1998. "Without these foreign workers, many public construction projects would be difficult to complete," Lin says.
Some people also claim that if Taiwan refuses to employ foreign workers, its national competitiveness will be adversely affected. "As we know, labor is one of the most important factors of production. If other countries use cheaper labor, and we still insist on using more expensive local labor, our industries will lose their competitiveness in the world market," says CIER's Ma Kai. Hence, although he acknowledges the criticism of some that the introduction of foreign workers has brought Taiwan certain problems, Ma argues that Taiwan must employ more foreign workers.
"The issue of foreign workers is very similar to that of oil. For example, if the world finds a big, new oil field, the price of oil will fall and more people will use oil. When oil consumption increases, air pollution will be taken more seriously. People who sell coal will perhaps lose their jobs, and the equipment that uses coal for fuel will perhaps become junk. However, is it wise to refuse the cheaper oil just to protect the coal industry?" Ma asks. "The world is just like a battlefield. Everyone has to fight for survival. Workers should not be overly protected or they will not be able to adjust to the world situation. I think what should be done is to help transform people into employers of foreign laborers instead of competitors with foreign laborers. Through training, those people whose employment opportunities have been threatened by foreign workers can actually be benefited."
Foreign workers have been called "Taiwan's third ethnic group" (after indigenous and non-indigenous local residents), because their numbers have so increased in recent years. On Sundays, thousands of foreign workers gather at Taiwan's railway stations, parks, malls and churches, to spend time with their friends. In the last decade, OCWs have made real contributions to Taiwan's economic development. At the same time, foreign workers have earned money in Taiwan to improve their families' living conditions back home. This interdependence will not change in the immediate future, and, if all concerned parties look for ways to cooperate and to communicate, perhaps they will discover the best options for everyone.