Raise Wages by Increasing Competitiveness

Raise Wages by Increasing Competitiveness
China Times editorial (Taipei, Taiwan, ROC)
A Translation
May 14, 2014

Summary: Labor Minister Pan Shi-wei suggested that the Legislative Yuan consider implementing a "region-based minimum wage." This provoked opposition from local government officials and labor groups. Minister Pan subsequently clarified. He said he was referring to the living wage. His clarification was followed by a regularly scheduled Ministry of Labor press conference, which stated that the minimum wage would apply everywhere. Local governments would establish living wages based on local conditions.

Full Text Below:

Labor Minister Pan Shi-wei suggested that the Legislative Yuan consider implementing a "region-based minimum wage." This provoked opposition from local government officials and labor groups. Minister Pan subsequently clarified. He said he was referring to the living wage. His clarification was followed by a regularly scheduled Ministry of Labor press conference, which stated that the minimum wage would apply everywhere. Local governments would establish living wages based on local conditions.

Wages and salaries have long been a national concern. Average salaries have not increased in 16 years. This has led to complaints that "Low wages are a national embarrassment." Demands for salary increases are ubiquitous. The question is how. The key is the correct government policies and the correct social attitudes.

First, the Ministry of Labour quickly corrected itself. This should exempt it from any futile "spittle war." When Sean Chen was premier, the government began planning for free trade zones. At the time many advocated "virtual offshoring" inside these zones, so that foreign workers' salaries could be delinked from the minimum wage. This was intended to help companies save on labor costs, But opposition by labor groups and the CLA made this impossible.

Labor groups cited a substitution effect. Foreign labor would replace local labor. Local labor employment conditions would deteriorate. Local labor job opportunities would diminish. The CLA said labor relations and labor rights were universal values. It stressed that foreign workers must receive the same minimum wages. Delinking the two would violate labor rights. The government had to uphold non-discriminatory minimum wage guarantees

But the distinction between the minimum wage and a living wage is essential. The former takes care of disadvantaged workers on the bottom rungs of the labor force. It ensures that they have the required minimum purchasing power. All employers should offer more than just the minimum wage. Failure to do so is illegal. The minimum wage is established and adjusted by the Ministry of Labour Temporary Advisory Committee. It is consistent throughout the country. But local governments can set living wages based on local characteristics, prices, employment data, and life styles. This can ensure competition and avoid current economic stagnation.

Comptroller data shows that the 2012 national average monthly consumption expenditure per capita was about the same as the minimum wage. They were 18,774 NT and 18,780 NT respectively. This suggests that our national minimum wage is reasonable. But a considerable gap remains between the city and the country. In Taipei, consumer spending is 135% of the minimum wage. In Yunlin County its is only 74%. Wages are different in different regions. Higher wages or wages in excess of the minimum wage will exist. We are not labeling counties in central and southern Taiwan as poor. We are merely presenting the facts. In the central and southern regions life is slower paced and healthier. In Taipei and New Taipei life is hectic. Taipei and New Taipei have higher living wages. To some extent this is compensation for poorer working conditions and higher living costs.

When living wages are different throughout the country, local leaders can take advantage of the differences to make economic breakthroughs and pad their resumes. Local governments can seek government subsidies or public works projects to provide workers with a living wage higher than the minimum wage. They can rely on their own fiscal efforts to attract investments by means of local tax policy. In the wake of economic development, local prosperity, and tax increases, they can then offer employees higher wages. When the relevant enterprises and government salaries change, private sector companies will be pressured to follow suit. The result will be a virtuous cycle of rising wages.

Wage earners should be able to earn better wages. During a recent discussion, New Taipei Mayor Eric Chu called on companies to pay more in taxes if they failed to increase salaries. Taipei Mayor Hau Lung-bin argued that increases in the minimum wage should not be limited by increases in the consumer price index. Both were moves in the right direction. Over the past 10 years, only once has the Republic of China's CPI risen more than 3%. Obviously the mechanism is slow to respond. The government must implement a more proactive system.

The Mainland authorities' minimum wage system was created in 2003. Back then the minimum wage on Taiwan was seven times that on the Mainland. Over the past 10 years, the Mainland authorities have raised the minimum wage more than 10% each year. Cumulatively, they have raised it to over twice its original rate. Taiwan authorities, by contrast, have increased the minimum wage by only 10%. The two sides' minimum wages are getting closer and closer. The current minimum wage on Taiwan is merely two times that on the Mainland.

The relationship between economic growth and wage growth is not a one-way street. Over the past 20 years, Taiwan used the labor dispatch system. This greatly reduced government and corporate personnel costs. Businesses were not subject to salary pressures. Cost savings led to growth. Bosses became accustomed to earning easy money. They were no longer under pressure to upgrade and innovate in order to add value. Such thinking must be changed.

Eric Chu said the key problem on Taiwan is the "distribution of wealth." We agree. The government has recommended corporate tax cuts as carrots. But only amending the tax system will provide a root cure. The tax system should take into consideration a company's employee hiring practices and employee salaries. These should become important indicators of corporate social responsibility. We look forward to harmonious labor relations, to dedicated employees who serve the company out of a sense of duty, and to bosses who regard employees as assets, and offer them a share of the company's profits. Such changes could enable Taiwan to experience a rebirth.

社論－以競爭機制提升工資是正道
2014年05月14日 04:10 中國時報 本報訊

勞動部長潘世偉在立法院拋出「分區基本工資」想法，引發部分縣市首長與勞團的反對。潘部長隨後澄清，他所指的是生活工資（living wage）。接著勞動部利用例行記者會聲明，基本工資國內各地區一體適用，擬讓地方政府增訂因地制宜的「生活工資」。

工資及企業加薪問題舉國關切，其來有自。受薪階級平均薪資已停滯16年，引發「低薪是國恥」的民怨，要求調薪呼聲四起。如何做？正確的政策方向與社會心態的調整是最大關鍵。

首先，勞動部迅速改口，應該可以免除一場徒勞無功的口水戰。猶記得陳冲內閣時代，政府規畫設置自由經濟示範區，當時不少主張「虛擬境外」，在園區內讓「外勞薪資與基本工資脫鉤」，本意在幫企業節省勞動成本，但受到勞團及勞委會反對，最後無法實行。

勞團的論點是勞動具有替代效果。外勞會取代本勞，讓本勞就業條件惡化及減少本勞就業機會。勞委會則引用勞資關係和勞工權益普世價值觀，強調外勞必須一體適用基本工資規定，脫鉤就違反基本勞動人權，政府必須遵守最低保障無差別待遇原則。

然 而區分基本工資與生活工資是有必要的，前者是要照顧底層弱勢勞工，讓他們有維持基本生活所需的購買能力，所有雇主都應提供基本工資以上的工資水準，否則違 法。基本工資由勞動部設置審議委員會訂定及調整，全國一致。但各地方政府可以根據當地特色及地區性之差異，物價、就業等反映生活壓力的數據，訂定生活工 資。這樣可以引入競爭機制，突破目前的悶經濟。

依據主計總處資料，2012年全國每人平均每月消費支出，與基本工資差不多，分別是 18774元與18780元，表示我國的基本工資合情合理。但是，各縣市落差頗大，台北市消費支出是基本工資的135%，雲林縣只有74%。讓各地生活工 資金額不同，加薪或超越基本工資的幅度就可以相異。這不是讓中南部地區縣市貧窮標籤化，而是具體事實的呈現。中南部可以慢活，養生，雙北則是緊張忙碌。雙 北較高的生活工資，某種程度是忍受不良作息、高物價的生活貼水。

當各地的生活工資不同，地方首長可以藉此創造政績，突破經濟大悶鍋。各地 方政府一方面可以要求接受政府補助，或承攬政府公共工程的企業廠商，要給予勞工高於基本工資的生活工資；二方面憑自己的財政努力，由地方稅稅收招商引資、 發展經濟，地方繁榮，稅收增加後，就能給予員工更高的津貼。當相關企業及政府薪資動起來，民間企業就會有壓力，見賢思齊下，成就工資上升良性循環。

為 了讓受薪階級能有好一點的工資，在最近的討論中，我們聽到新北市長朱立倫呼籲賺錢企業若不加薪就應多繳稅，台北市長郝龍斌也主張調整基本工資不應受消費物 價指數漲幅3%的限制，這些都是正確的方向。過去10年來我國物價指數漲幅只有一次超過3%，調整機制顯然緩不濟急，政府應有更積極的制度與作為。

中國大陸最低工資制度始於2003年，當時台灣基本工資約為大陸7倍，10年來大陸幾乎每年調幅超過10%，累積已調升兩倍多，台灣則只提高了一成多。兩岸的工資水準越拉越近，現在只有大陸的兩倍多。

經濟成長與工資增長的因果關係，絕非單行道，台灣過去20年盛行派遣制，政府及企業人事成本大大減少，企業沒有調薪的壓力，節約成本就可以創造成長，老闆習慣賺容易錢，失去追求升級轉型及提升附加價值的創新壓力。這樣的思維，應該要改。

我 們贊成朱立倫所說，台灣關鍵的問題是「財富分配」，建議政府除了給企業減稅的「胡蘿蔔」外，「財稅制度」的修正才能治本。政府在稅制上應連動到員工的雇用 及薪水，成為實現企業社會責任的重要指標。我們也期望再造和諧勞資關係：員工盡心盡力，以服務公司為職志；老闆視員工為資產，分享企業利潤，則台灣可以脫 胎換骨。