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September 21, 2017

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Taiwan needs to shore up salaries for workers

The labor authorities have proposed that the nation adopt a living wage scheme, allowing different areas of the country to set pay levels in line with their respective living standards.

The proposal is again highlighting the much-lamented fact that salary levels in Taiwan are too low.

While the living wage proposal marks an attempt by the government to address the salary issue, such an idea has not been well received.

It is not difficult to see why the idea is not popular: such a scheme would only offer help to a small portion of workers and would hardly provide a fundamental solution to the problem of bumping up salaries for all workers.

Skepticism over living wages may also have its roots in Taiwanese culture. The idea of a living wage is nothing novel internationally; it has been practiced in other countries.

But it may be too radical for Taiwan. It is radical in the sense that Taiwan has always embraced the principle of uniformity in the name of fairness, ignoring the fact that fairness does not necessarily mean everyone receives the same treatment.

A university professor in Taiwan seldom receives more or less than his or her colleagues, because their payroll follows a standardized scheme.

All civil servants are also paid according to a standardized scheme, ignoring the fact that some may have to work more than others on the same level in the hierarchy who have less work.

Now the government has to convince the public that the living wage proposal is a fair one despite its deviation from socially-accepted norms.

People in Taiwan would usually admit that living standards vary in different parts of the country. The cost of housing or food in Taitung is generally lower than in the metropolitan areas of Taipei or Kaohsiung.

But they probably would not agree that people working in Taitung should be paid less than their counterparts in Taipei.

The living wage proposal is basically looking to increase the incomes for those in areas with higher living costs.

But we think there is one fundamental issue that the government needs to address: is the minimum wage already enough to support one's life in those areas with lower living standards? If this is not the case, should the living wage to be extended to all workers? And if so, why shouldn't the government increase the minimum wage itself?

Of course, it is not so easy to raise the minimum wage, which involves much arm-wrestling between labor and business. Businesses have often responded to calls for wage increases by threatening to leave Taiwan for places offering cheaper labor.

The living wage proposal only seems to be looking to raise the income of a small portion of workers. This seems to be a government strategy intended not to antagonize too many businesses.

But is that the best the government can do? The problem is not only the minimum wage, but also general salary levels.

In theory, the government is able to determine only the minimum wage level. It may be a different story trying to shore up overall salary levels for laborers as it involves an employers' willingness to cooperate — something the government does not usually have control over.

But that doesn't mean that the government cannot do more than just make open calls on employers to raise salaries for their employees.

Eric Chu, mayor of New Taipei City, has suggested raising taxes for businesses that are reluctant to raise salaries for their employees.

That may be radical too, but it may also be feasible.

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