Supply and demand is not strictly an economic phenomenon. It’s also political, cultural, and so on. There is overwhelming demand for the improvement of society, and the government has a mandate to be part of the supply solution. The demand for improvement includes the demand for a livable wage, the demand for a livable pension, the demand for enough rest time that people won’t die of karoshi and can actually have some enjoyment in life, and so on.
These are the labor related rights that Taiwan has promised to uphold, or “supply”, so to speak.
- The States Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right.
- The steps to be taken by a State Party to the present Covenant to achieve the full realization of this right shall include technical and vocational guidance and training programmes, policies and techniques to achieve steady economic, social and cultural development and full and productive employment under conditions safeguarding fundamental political and economic freedoms to the individual.
It’s hard to meet that demand without a minimum wage and maximum work hours.
The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just and favourable conditions of work which ensure, in particular:
(a) Remuneration which provides all workers, as a minimum, with:
(i) Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work;
(ii) A decent living for themselves and their families in accordance with the provisions of the present Covenant;
(b) Safe and healthy working conditions;
© Equal opportunity for everyone to be promoted in his employment to an appropriate higher level, subject to no considerations other than those of seniority and competence;
(d ) Rest, leisure and reasonable limitation of working hours and periodic holidays with pay, as well as remuneration for public holidays
It’s hard to meet that demand without a minimum wage and maximum work hours.
Tl/dr: the right to form unions and do union stuff.
It shouldn’t be necessary if the government takes care of everything, but the government doesn’t take care of everything.
The States Parties to the present Covenant recognize the right of everyone to social security, including social insurance.
It’s hard to meet that demand without a proper pension system.
Finley has a very good point about all jobs not being equal, though I strongly disagree with his belief that anyone with a menial job is necessarily retarded, or even unskilled. People take menial jobs – or don’t take other jobs – for various reasons. And the more jobs disappear, the more skilled people will be stuck in menial jobs or unemployed.
There is another way, a basket of minimum wages, in recognition of the fact that entry level in one industry is not the same as entry level in another, and even within an industry you may find a lot of variation. Australia figured this out a long time ago(*) and has a whole set of minimum standards for basically every job you could imagine, plus a miscellaneous set of standards for all the jobs they didn’t think of. (This is what Aussies mean when they talk about “awards”.)
The system has some flaws, like the government not trying very hard to educate people about how it works. They tend to assume everyone – including foreigners – will ask them, so when people don’t ask, they tend to assume it means everything’s fine. Yet there’s no shortage of foreigners who don’t even know the system exists, and there’s a perception in some industries that employers prefer foreigners because it means they can get away with not abiding by the awards.
On top of the sliding minimum wages by job and by experience, they also have sliding minimum wages for young people, ages 15 to 21 (and 14 in some states) iirc. Great, you may say, young people will get experience! Now walk into a typical fast food establishment and see if you can spot a single staff member over 15, apart from the manager.
Meanwhile, you have locals who insist they are ignored by employers and can’t afford food and shelter, employers who insist the government needs to import more foreigners, a government that insists the solution to unemployment is basically to remove what food and shelter the unemployed have, and elites who say things like, “The reason young people don’t own houses is because they don’t have the courage to borrow money from their parents.” (Not an exaggeration.)
The business culture in most societies demands this kind of thing: reduce costs, increase profits, that is the meaning of life. That expresses the same thing most people want – improvement – just from a different angle. But when it manifests simply as reduce wages, increase working hours (for example equating working hours with productivity), it also displays a lack of long term thinking.
*Taiwan also recognizes that one size does not fit all, but Taiwan’s solution is basically to leave everything that doesn’t fit to the market. Most private sector jobs (and some public sector ones) are now within the scope of the Labor Standards Act. For any job on the Art. 84-1 list, the standards in key areas like working hours do not apply, and the contract prevails, as long as it doesn’t amount to exploitation. The question then is, without minimum standards, how do you determine whether or not a contract is exploitative? (Inequality of bargaining power is also an issue, obviously.)
Iirc, Taiwan used to have a lower minimum wage for child workers but recently abolished it (i.e. raised it to the adult level).
Let’s have another look at what the MOL said during the Ma years:
If foreign workers’ wages were decoupled from the Basic Wage, would it actually be beneficial for our country’s industries and social development?
It would actually be harmful.
(1) In recent years, our country’s average salary has not risen, and if foreign workers’ wages were decoupled from the Basic Wage, and employers competed for the cheapest foreign workers, we would risk a negative effect on wage growth [lit. fear of affecting the adjustment of the kintetic energy of wage growth], which would be harmful to Taiwanese workers.
(2) The development of our country’s industries has already transformed them from labor-intensive to capital- and technology-intensive. The development of industrial competitiveness should prioritize raising labor conditions, improving work environments, and increasing the quality of human resources, to encourage workers to increase productivity, and labor and management will then be able to share the economic result. Therefore, if foreign workers’ salaries were decoupled from the Basic Wage, it would affect the quality of the country’s human resources and competitiveness, harming the sustainable development of industry. Using cheap foreign workers would basically send our country’s industries down the drain, industrial development would have no way to move forward [lit. become high quality], we would have no way to attract high quality manpower, and the desirable human resources abroad would have no desire to come to our country for employment, and if this were to continue long enough, our country would become a backwater.
If you take foreigners out of the equation, the same principles apply within a society, more or less.
Whether you are pro-Beijing or pro-independence, take note: China and the US both value the island for its geographical location, and that will not change. What can change is how willing both sides are to bomb Taiwan back to the stone age if the other side refuses to let go. People used to say Taiwan’s valuable industries functioned as a shield because neither side would risk destroying them. If all you have is a bunch of rusty factories staffed by the unskilled, there’s little incentive to handle with care.