At the Cabinet's weekly meeting today, Premier Jiang Yi-huah commended the Ministry of Labor (MOL) for swiftly brokering an agreement with labor and employer representatives on hiking Taiwan's minimum wage next year.
From July 1, 2015, the monthly and hourly minimum wages will both be raised, with the former increasing 3.81 percent from NT$19,273 (US$642.43) to NT$20,008 (US$666.93) and the latter at a comparable rate from NT$115 (US$3.83) to NT$120 (US$4.00), the premier said.
Taiwan's average unemployment rate during the first seven months of the year had been brought down to 3.98 percent, Jiang said, and the economy is now forecasted to grow more than 3 percent for the whole year. However, the consumer price index (CPI) for the food category rose sharply by 3.82 percent year-on-year during the first seven months of 2014. While rising food prices may not affect high- and middle-income consumers as much, the low-income consumers—especially their families—will feel the impact the most, as they are in need of special attention, Jiang said.
Premier Jiang emphasized that taking care of workers' basic livelihoods is among the government's foremost responsibilities. Before President Ma Ying-jeou took office, Taiwan's minimum wage had not been raised for many years. Having made several adjustments, the administration is now preparing to institutionalize the minimum wage review process. In principle, a review committee will meet every year in the third quarter to decide whether and how much the wage should be adjusted, depending on factors such as the economic growth rate and the CPI. Institutionalizing the process, Jiang said, will be very helpful for raising the wages of entry-level personnel and young part-time workers.
The premier also requested that the MOL and its newly established task force to look into issues raised by the private sector about minimum wage adjustment. The minimum wage review mechanism should be comprehensive and meet the society's expectations, he said.
As for the general public's concerns that places like Hong Kong and Singapore have either decoupled foreign workers' wages from the minimum wage or abolished the minimum wage mechanism altogether, Jiang requested the MOL to promote publicity on the government's policies. Improving the public's understanding of all the issues will facilitate the national discussion and build a better basic wage mechanism, he added.
"Businesses that share profits with their employees are creating labor-management harmony and aiding overall economic competitiveness. Hence, government agencies should not only care for disadvantaged workers but also help businesses increase revenues and encourage them to share profits with workers," said Jiang.
The Financial Supervisory Commission (FSC), for example, asked the Taiwan Stock Exchange Corp. to compile the Taiwan Top Salary 100 Index, which is a bellwether of Taiwan's 100 highest salary paying companies. Launched last month, the index will encourage other businesses to raise wages and retain talents, bringing about a win-win-win situation among employees, investors and businesses, added the premier.
Regarding misconceptions that a "high salary" index would be skewed toward managers and executives and therefore is unable to reflect the actual situation, the premier instructed the FSC to step up publicity to enhance people's understanding of the purpose and significance of the index.