Business groups urge complementary measures for wage hikes

06/06/2022 10:55 PM
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CNA file photo
CNA file photo

Taipei, June 6 (CNA) Several business groups in Taiwan on Monday called for the government to come up with appropriate complementary measures after President Tsai Ing-wen (蔡英文) said she hoped her government could continue raising the minimum wage every year.

The business groups said that while the president wants to increase the minimum wage, her government should also be aware of the difficulties businesses are facing and the need for financial relief amid the current COVID-19 outbreak.

Speaking at the annual assembly of the Taiwan Confederation of Trade Unions (TCTU) on Monday, Tsai said her administration has a plan in place to raise the minimum wage every year and is determined to overcome obstacles to achieve the goal.

Tsai's government has raised the minimum wage six years in a row. In the latest hike decided last year, the minimum monthly wage went up 5.21 percent, or NT$1,250 (US$42.52), to NT$25,250, and the minimum hourly wage rose from NT$160 to NT$168, effective Jan. 1, 2022.

Lee Yu-chia (李育家), head of the National Association of Small & Medium Enterprises, one of the groups that was concerned about the policy, said export-oriented industries, such as the semiconductor industry, were still growing because of robust global demand.

Many domestic demand-oriented small and medium-sized enterprises, on the other hand, have been hit hard by weaker private consumption amid a spike in COVID-19 infections in the past two months, Lee said.

Thus, the government should come up with supplemental financial relief policies targeted at the industries that really need financial assistance, Lee said, adding that he opposed a blanket relief package.

Lee suggested that the government consider tax cuts and deferred tax payments to reduce the financial burden shouldered by employers who have suffered the most from the COVID-19 outbreak.

He praised the government for the financial aid given to certain small and medium-sized enterprises last year to help with the latest minimum wage hike, effective from Jan. 1.

Echoing Lee, Hsu Shu-po (許舒博), chairman of the General Chamber of Commerce of the Republic of China, said the service industry has been the victim of the pandemic in the last two to three years, and he supported financial relief tailored to those businesses.

Beyond taking into account the health of individual industries, Hsu said the government should also consider economic growth and inflation.

Average real regular wages fell in Taiwan in the first quarter, the first quarterly decline in six years, because of higher prices.

The consumer price index (CPI) rose 2.81 percent in the first quarter, while the average nominal regular wage before being adjusted for inflation was up 2.71 percent, according to government figures.

At the end of May, the Directorate General of Budget, Accounting and Statistics lowered its forecast for Taiwan's 2022 gross domestic product (GDP) to 3.91 percent, falling below the 4 percent floor the government had previously anticipated, due to weakening private consumption.

"Without appropriate financial relief, many COVID-19 affected companies are likely to cut their workforces, and in turn, workers will suffer," Hsu said.

Lin Por-fong (林伯豐), chairman of Taiwan's Chinese National Association of Industry and Commerce, said a hike in the minimum wage is not the only way for the government to take care of workers.

The government should think about other options such as increases in medical care insurance coverage or special housing for workers.

(By Tseng Chih-yi and Frances Huang)

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