Taipei, Aug. 14 (CNA) Labor and management are divided over the minimum wage hike for 2020 proposed by a Ministry of Labor screening committee Wednesday.
If approved, the minimum monthly wage will rise by 3 percent from NT$23,100 (US$737) to NT$23,800, while the minimum hourly wage will increase by NT$8, or 5 percent, per hour to NT$158, the ministry announced following an annual meeting of its Basic Wage Deliberation Committee.
However, the proposal must still be approved by the Cabinet.
Speaking following the meeting, Minister of Labor Hsu Ming-chun (許銘春) said since President Tsai Ing-wen (蔡英文) took office in 2016, the minimum wage has increased four times, representing an accumulated rise of NT$3,792 in the minimum monthly wage and NT$38 in the minimum hourly pay.
On this occasion, the higher minimum monthly wage will benefit more than 1.83 million workers -- including 1.36 million Taiwanese and 465,500 foreign workers, she said.
Taiwan Labour Front secretary-general Son Yu-liam (孫友聯) said he welcomes the fourth consecutive annual increase, even though he is disappointed that the 3 percent hike in the basic monthly wage fell short of the 5 percent wanted by labor groups.
He urged management to view the wage hikes positively, because workers having no way to improve their lives would also impact Taiwan's economy.
The issue of low wages has become a problem in Taiwan's society, while adjusting the basic wage is one of the most effective tools the government has at its disposal and the only chance many have of receiving a pay hike, Son said.
Son called for a mechanism to guarantee an annual increase through legislation.
Taiwan Confederation of Trade Unions director-general Chuang Chueh-an (莊爵安), a labor representative at the meeting, voiced regret over the 3 percent basic monthly wage hike, adding that he had expected a bigger increase, because "Taiwan's workers deserve better treatment."
Ho Yu (何語), director of the Chinese National Federation of Industries and a management representative, said that with the 3 percent rise in the minimum monthly wage, enterprises could see labor costs grow by NT$20 billion per year.
Given that 1.48 million companies, or 96 percent of Taiwan's corporations, are mainly small and medium-sized export-oriented businesses, seven major business groups are disgruntled with the wage hike, as it outstrips GDP growth and will slash Taiwan's export competitiveness, Ho said.
Amid an ongoing trade war between the United States and China, Taiwan's export outlook remains grim, especially for the telecommunications component industry, according to Ho.
Lai Cheng-yi (賴正鎰), chairman of the General Chamber of Commerce, said the 5 percent increase in the minimum hourly wage will impose a great burden on gasoline stations and fast foods operators, which could result in business closures, impacting the job market.
Lai suggested the government provide monetary assistance or preferential loans to those businesses.
In the face of the wage hike, McDonald's said it will respond in line with the law.
The American fast food chain has a workforce of 20,000 in Taiwan, with 90 percent being workers paid by the hour.
American restaurant chain TGI Fridays said product prices will be adjusted to reflect rising personnel costs.
TGI Fridays (Taiwan) Inc. senior managing director Jeff Lee (李宏智), said the company will be more careful with personnel management by hiring more full-time workers and reducing the number of part-time workers.
The 5 percent hike in the minimum hourly wage is expected to benefit about 500,000 workers -- mainly those aged 15-24, according to an owner of three convenience stores who requested anonymity.
Given the NT$158 hourly pay is more attractive than a NT$23,800 monthly wage, the number of atypical gig workers will continue to grow, he predicted, noting that the number hit a new high of 814,000 last year.
C.Y. Cheng (成之約), chairman and professor at the Institute for Labour Research under National Chengchi University, said the higher increase in the minimum hourly wage will test the flexibility of the retail businesses and service providers.
They could also transfer the extra cost to consumers and be less willing to hire, he added.
Meanwhile, the legislative caucuses of the ruling Democratic Progressive Party and the opposition Kuomintang said they are in favor of the wage hike and urged the executive branch to do more to address the issue of low wages.