Taiwan business group proposes capping minimum wage increase at 3% — Taipei Times
In Taiwan, a major business group has proposed limiting next year’s minimum wage increase to 3% to reduce the burden on companies, particularly traditional industries facing rising costs. Taipei Times reports, citing Third Wednesday Club Chairman Lin Po-feng.
Business proposal
Lin Po-feng said that profitable companies should raise employee compensation. At the same time, businesses operating amid weaker business conditions should, in his view, receive tax breaks and other government support to offset higher personnel costs.
According to the association’s chairman, a 3% increase would be more reasonable given the impact of inflation. His statement came ahead of a meeting of the minimum wage review committee, at which authorities are expected to decide on an increase for next year.
Rising labor costs
Taiwanese authorities have raised the minimum wage for 10 consecutive years, Lin said. Over that period, the monthly minimum wage has increased by a cumulative 47.4%, while the hourly rate has risen by 63.3%.
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He also noted that minimum wage increases raise employers’ mandatory expenses, including contributions to labor and health insurance systems. He estimated that such payments account for about 20% of personnel costs.
Energy, rates and staffing
Lin Po-feng, who also chairs Taiwan Glass Industry Corp, said that higher labor costs are putting pressure on businesses, especially traditional sectors. This is happening despite Taiwan’s economy being forecast to grow by 11.05% this year due to the artificial intelligence boom.
The Third Wednesday Club chairman called on the government to continue incentives and subsidies for companies that raise wages and share profits with employees, instead of a broad increase in the minimum rate. He also advocated keeping interest rates unchanged, improving energy policy and more actively attracting foreign specialists by simplifying visa procedures, work permits, tax incentives and housing support.
