Labor reform...not going well


#1

In spite of all the loss of life through tertrible accidents caused by exhaustion, and the cost of labor being low enough as it is, plus low enforcement of NHI a nd laobao payments, it seems teh economy is in such a state -or so they want u sto believe- that Taiwan simply can’t afford to pay fair wages or have workers rest reasonably. Again, we are struck with the “my way or the highway”… and we know last time enterprises said that was election time… and they won, but left anyway, and then they came back.

Anyways, for your perusal, the kind of in the box thinking that crashes planes and buses:

http://focustaiwan.tw/news/aeco/201702150010.aspx

Choice bits:

Some 73 percent of the respondent enterprises expressed a negative opinion, while 26 percent said the new work rules, which went into force Dec. 23, 2016, have had a positive affect, the survey by jobbank 104 Corp. shows.
The poll also indicates that 23 percent of the respondents reported increased labor costs, with the scale of growth at 11 percent on average, while 63 percent estimated that they will see a decline in their annual profits this year, at an average of 11 percent.

Interesting 11%.

Fifty-six percent of the polled enterprises complained that thanks to the new work rules, they are now busy doing human resource management (HRM), instead of human resource development (HRD), said 104 Human Resource Institute senior deputy manager-general Stanley Hua (花梓馨).

Uh?

Employers now face much higher overtime costs than previously if they ask employees to work on their “flexible” day off, and they are not allowed to have employees work on their mandatory day off because the rules mandate that workers can work for no more than six days in a row.

Duh.

How can we remove/at leats make them reevaluate the idea that working 7 days a week, 52 weeks a year, is not the best way to profit?

The pension reforms may not seem to be that related, but considering how the rising cosst make employeers skip on laobao, well, it is a related problem.

http://focustaiwan.tw/news/aipl/201702160007.aspx

Taipei, Feb. 16 (CNA) Nearly 70 percent of people in Taiwan have expressed concern that they or their children might not be able to receive a pension if the country’s various pension systems go bankrupt, according to a poll released by the Taiwan Thinktank Thursday.

It also shows that 67 percent of those polled expressed support for pension reforms.

My Math is weak here.

New Power Party Legislator Hsu Yung-ming (徐永明) said that most respondents, whether in the military or public sectors, are worried that the nation’s various pension systems are likely to go bankrupt within a few decades, which will make them unable to receive pension payments in the future.

Therefore, pension reforms should go ahead, Hsu added.

What about the other pension systems?


The robot revolution thread
Asian tigers leaving Taiwan behind (2018 edition)
#2

At one time, I encouraged all my Taiwanese friends to not “volunteer” their time after work hours, or fight for “fairer” wages and better working conditions, and that this would help them modernize.

But recently, last year, I read Mises Human Action, and made me think twice. Countries are completely different in the amount of accumulated capital over the years present in such countries. Here is a quote that really made me think, keep in mind, he is writing in 1940’s or perhaps earlier, so conditions would have changed dramatically. Even so, there is still a nugget of truth in it that could explain low wages, long hours in Taiwan compared to Europe and America. They enjoy the conveniences of Western inventions and capitalism, (i.e., imported foreign capital), but still lacking in domestic capital accumulation and must pass through their own Industrial Revolution:

Let us stress one aspect of the matter only. Vast areas–Eastern Asia, the East Indies, Southern and Southeastern Europe, Latin America–are only superficially affected by modern capitalism. Conditions in these countries by and large do not differ from those of England on the eve of the “Industrial Revolution.” There are millions of people for whom there is no secure place left in the traditional economic setting. The fate of these wretched masses can be improved only by industrialization. What they need most is entrepreneurs and capitalists. As their own foolish policies have deprived these nations of the further enjoyment of the assistance imported foreign capital hitherto gave them, they must embark upon domestic capital accumulation. They must go through all the stages through which the evolution of Western industrialism had to pass. They must start with comparatively low wage rates and long hours of work. But, deluded by the doctrines prevailing in present-day Western Europe and North America, their statesmen think that they can proceed in a different way. They encourage labor-union pressure and alleged prolabor legislation. Their interventionist radicalism nips in the bud all attempts to create domestic industries. Their stubborn dogmatism spells the doom of the Indian and Chinese coolies, the Mexican peons, and millions of other peoples, desperately struggling on the verge of starvation. [p. 624]

https://mises.org/library/human-action-0/html/pp/828


#3

How long, then, are low wages and long hours supposed to last before the promised economic situation is reached?


#4

At least in what pertains to Latin America, that quotation sounds to me like the guy who wrote that our overpopulation was due to not having TV.

How long, then, are low wages and long hours supposed to last before the promised economic situation is reached?

Agreed, YYY. I think Taiwan went already through that part and paid its dues. It is time now to move to a higher level. Alas, the interests that hold Taiwan back are not unions or pro labor legislation enforcement. On the contrary, me thinks.


#5

Low wages and long hours are endemic of something bigger gone wrong on economics. But the whole world is sick under ultra-low interest rates and easy money, so that may have a greater part to do with it. It has caused unemployment in the USA and countries with minimum wages and proactive unions and pro-labor legislation, (which is where Taiwan may be headed if they don’t create wealth soon.) It causes low wages that barely pay life expenses, very thinly distributed in other countries, like Germany, the only western European nation with no minimum wage and good employment figures. The situation isn’t too good anywhere, except countries that have bucked the trend with a strong currency and raised interest rates, like Korea did couple a years ago.

As for going through Industrial Revolution, which I think might be part of it, that takes time to develop a country’s domestic market, and probably Taiwan has gone through the first stages, but doesn’t have a fully developed economy with plenty of accumulated capital of its own, so comparisons with the USA will most likely always fall short. Maybe they are in the American 1870s or 1880s, as far as capital per head and optimization of economic resources.

I wish I could be optimistic about Trump on fighting low interest rates and low currencies, but I don’t presently. We badly need American leadership on this issue. Or German leadership, whose wise monetary policies has been swallowed up by the EU juggernaut.


#6

Taiwan’s only natural resources are low wages, skilled workers and long hours. Reducing two of those advantages without compensating somehow will inevitably lead to further economic decline. As a producer in Taiwan I see the fairness of the labor reforms but I’m also experiencing higher costs and longer leadtimes as a result. One interesting footnote is Taiwan is currently experiencing capital inflows because it has become a de facto tax haven due to its status as an outsider in international affairs and those capital inflows have some economic benefits. Taiwan’s tax haven status will only prove temporary though.


#7

Yes, low wages and long hours are necessary, because compared to Western nations, Taiwan company’s ROE (return on equity) is really terrible. They haven’t figured out how to make money, how to do business smarter, how to meet the needs of customers, treating them like king, or something they’re not getting right. They’re individual thinking is still like medieval fiefdom, or like the Indian caste system, they are only democratic and capitalist on the surface, but it isn’t ingrained yet in their character, they still see each other and treat each other like lords and servants. Businesses as the king and good stewards of universal taste and fashion for what peon customers should buy, etc. They don’t see employees as for the sole benefit for making profit, but as a reminder of their high status as employer and benign lord of society,. etc. Too much of this kind of thinking out there, which prevents more objective profit-seeking channels.

And when was the last time Taiwan had normal interest rates? I remember in 2002 they were just as low as now, when the rest of the world was still normal. That may have something to do with it. There’s no way out; Taiwan has to create total national wealth and capital accumulation before wages and other conditions can rise naturally. Low interest rates, weak currencies is a recipe for wealth squandering.

If you force the issue with labor legislation, you’re just “taxing” businesses essentially, and eventually, they will stop hiring, or start firing, creating unemployment, and those “taxes” may reflect in higher prices to consumers, and voila, you get inflation. Government can tweak with the economy, but when it tries to beat down an ugly head over here, then it rears its ugly head over there (unintended consequences), if there is no wealth creation. If there is genuine wealth creation, the government doesn’t need to tweak.

When you raise minimum wages, then a lot of people won’t get employed as the wealth in the country is only enough to allow a limited number of select people to enjoy these higher wages, which is hardly fair for those seeking work – they’d probably prefer to work at the lower wages than nothing at all.


#8

[quote=“jotham, post:5, topic:158317, full:true”]
It causes low wages that barely pay life expenses, very thinly distributed in other countries, like Germany, the only western European nation with no minimum wage and good employment figures.[/quote]
I think you’re a little mixed up about Europe.


http://www.globalupside.com/germany-raises-the-minimum-wage-by-four-percent-in-2017/

The revised wage has increased by 34 cents to 8.84 euros from the earlier 8.5 euros per hour.

Even if you change Germany to one of those other countries, you still need to read the fine print.
http://ec.europa.eu/eurostat/statistics-explained/index.php/Minimum_wage_statistics

Countries not covered by minimum wage statistics
As of 1 January 2017, there was no national minimum wage in Denmark, Italy, Cyprus, Austria, Finland and Sweden; this was also the case in the EFTA countries of Iceland, Norway and Switzerland. In Cyprus, minimum wages are set by the government for specific occupations. In Denmark, Italy, Austria, Finland and Sweden, as well as in Iceland, Norway and Switzerland, minimum wages are laid down by collective agreements for a range of specific sectors.


They’re individual thinking is still like medieval fiefdom, or like the Indian caste system, they are only democratic and capitalist on the surface, but it isn’t ingrained yet in their character, they still see each other and treat each other like lords and servants. Businesses as the king and good stewards of universal taste and fashion for what peon customers should buy, etc. They don’t see employees as for the sole benefit for making profit, but as a reminder of their high status as employer and benign lord of society,. etc. Too much of this kind of thinking out there, which prevents more objective profit-seeking channels.

“Employers in Taiwan don’t have enough respect for their employees, and employees have too much respect for their employers.” To fix this, the minimum wage should be:
A) raised.
B) lowered.
C) abolished.

:ponder:

When you raise minimum wages, then a lot of people won’t get employed as the wealth in the country is only enough to allow a limited number of select people to enjoy these higher wages, which is hardly fair for those seeking work – they’d probably prefer to work at the lower wages than nothing at all.

That theory has a flip side: “employers would probably prefer to have lower profits and executive salaries than none at all.”

(I’m not saying that’s true btw, just offering it for comparison.)


#9

The student was working alone in a convenience store at about 11pm when another 17-year-old attempted to rob the store. The student resisted valiantly, but the robber pulled out a knife and chopped off his hand.

:eek:

In Saudi Arabia, you chop off the thief’s hand. In Soviet Taiwanistan, the thief chops off your hand.

The article goes on to explain that there are no regulations for part-time employees (distinct from co-op students) who are minors but too old to qualify as “child workers”. (The official translation of the LSA helpfully defines “child worker” as “over fifteen years old, but less than sixteen years old”. :doh:Which came first, the underpaid translator or the incompetent translator?) To be precise, “dangerous” work (as in dealing with hazardous materials) is still prohibited if the employee is under 18, but overnight work is permitted.

The article continues, explaining that labor insurance is (usually) not compulsory unless there are at least five employees. It’s easy to imagine a non-chain convenience store being in that category. (This has come up before. The deadline to amend all the laws that didn’t conform with the ICCPR & ICESCR was 2011, and the committee on labor law reform, whatever it was called, found that the fewer-than-five-employees exemption didn’t conform, but the finding was ignored.)

The Taiwan Alliance for Advancement of Youth Rights and Welfare and other groups have proposed amending the law, taking into consideration the recommendations of the International Labor Organization (ILO) regarding restrictions on nighttime work by people aged between 16 and 18.

However, this suggestion immediately encountered opposition, with some saying it would deprive teenagers of the right to work and that it would push nighttime work underground.

Others say that most young people who work nights need to do so for economic reasons, and questioned what these young people would do if they are not allowed to work in the evening.

While it is true that most youngsters who need to work at night are from economically disadvantaged families, this makes them more vulnerable to being exploited. All the more reason, then, for the government to come up with policies that reduce the pressure on disadvantaged households.

So, @jotham, this could have been avoided by lowering the kid’s parents’ wages, right? :ponder:


#10

I was going on information and a discussion I was having in 2008, I didn’t realize it was so long ago, 8 years ago. Germany has minimum wage now since 2014.

The claim was made on a pro-socialism, pro-union website, protesting the good unemployment figures in Germany compared to other EU nations was solely because of no minimum wages, and showing that the laborer’s situation isn’t better at all, as seen by articles like this: http://www.reuters.com/article/us-germany-jobs-idUSTRE8170P120120208

When I say the system is lords and servants, I’m saying society isn’t oriented toward an optimally efficient capitalist society that can accumulate capital and create wealth as in the West, which explains lower wages than the West. Raising minimum wages doesn’t create wealth. Without wealth, you’re just tweaking, and poverty will show up in one form or another no matter how government tweaks it.

When you’re talking about executive salaries, you mean the boss, (as opposed to the entrepreneurs, who hire them). But they are hardly effected by unemployment figures, but rather the poorer stratum, the common people, whose lot it behooves us to improve. Don’t confuse executives with entrepreneurs, from whom capital and jobs come from, not the executives, bosses, managers.


#11

[quote=“yyy, post:9, topic:158317, full:true”]
So, @jotham, this could have been avoided by lowering the kid’s parents’ wages, right? :ponder:[/quote]
Well, I don’t think Taiwan goes off the deep end with raising minimum wages. I agree, it seems pretty low. But it does support my earlier quote about the Industrial Revolution.

It was well known that children worked in the mines, for example, in very bad conditions. But at the start of the Industrial Revolution, suddenly the opportunity was there that wasn’t there before. Factories were in very crude, bad shape for these first poor employees, because the country was operating on very little capital accumulation produced by the prior fiefdom system. Yes, conditions were very bad at first.

But the poor were willing to endure these hardships to lift their lot, because the fact of their own poverty was hardship enough. Gradually, as wealth was created, as the poor classes had wherewithal to enjoy more of the amenities in life once reserved for aristocrats, conditions improved and you begin hearing social critics complaining about child labor and long hours, low wages…and all this was made possible because of the improvement, because these were the same people whose lot had been improved, who had experienced these hardships 20 or 30 years ago. And simple economics were already making conditions better, before the social critics caught on.

That’s why I say Taiwan is somewhere similar in that their development isn’t as economically mature as our countries, who already started with this, experienced this and beyond.


#12

When westerners tell people in developing countries how to develop their economies, there may be a negative reaction. “You’re trying to recolonize us! Why should people in ________ not enjoy the same prosperity as people in your country?” etc.

Westerners sometimes justify advice about development by saying, “We messed up our industrial revolution, big time!* For your own good and to save the planet too, please don’t repeat our mistakes!”

*Or big league.

Now along comes a westerner saying, “You don’t have the right to enjoy prosperity, not because you’re not as good as we are, but because you haven’t made the same mistakes yet. So spend a few more centuries messing yourselves up, and then we can talk.”

Meanwhile, bionic hands are available, but Johnny can’t afford one because he’s stuck working for $133 NT per hour and struggling to finish school with one hand.

Consider the following official opinions:


Summary: HK’s minimum wage is similar to Taiwan’s. Even though Singapore has no minimum wage, the total cost of hiring (foreign) workers in Taiwan is still competitive because Singapore charges employers more in taxes.


Summary: If you cut costs by paying foreign workers less than minimum wage, they will be less willing to come, and their governments will also be less willing to let them come.


Summary: WTO membership requires Taiwan to implement CSR policies and abide by ILO standards. If foreign workers are paid less than minimum wage, it will jeopardize Taiwan’s ability to sign free trade agreements.

外勞工資如與基本工資脫鉤,對我國產業與社會之發展是否真正有利?

反而不利。
(一)我國近年之平均薪資已實質未成長,外勞工資如與基本工資脫鉤,雇主競相使用較廉價之外勞的話,恐影響整體工資成長之動能,對台灣勞工不利。
(二)我國產業之發展,已從勞力密集轉型為資本技術密集產業。發展產業競爭力,應以提高勞動條件、改善工作環境、提昇人力素質為優先,以激勵勞工提高生產力,勞資才能共享經營成果。因此,外勞薪資若與基本工資脫鉤,將影響國家勞動素質及競爭力,反不利產業永續發展。使用廉價外勞本質上將使我國產業向下沉淪,產業發展將無法高質化,無法吸引優質人力,國外優秀人才也不會願意到我國就業,長期如此,我國將淪為落後國家。

Summary: If you win a race to the bottom, you actually lose.

These statements by the Ministry of Labor are all from November 2014.


#13

You’re going on subjective arguments now. I’m just looking at economic law, which is imperial everywhere on earth, no matter what nation, no matter what era. I’m saying if there isn’t wealth creation, then wages and material prosperity will not rise, at least not much. If government forces it, then unemployment will happen, and development is nil or very slow under these circumstances.

Bionic hands are possible only because of capitalism and capital accumulation. New or relatively new inventions are always pricey, like the first cars in 1900s, as only rich people can afford them first, and then later, lower strata as prices come down (despite inflation) and these days almost every poor American has a car (before Obama), this is the development of capitalism. Without capitalism, there would be no bionic arms, just like 50 or 100 years ago. We’re much wealthier as a society for these fine inventions.

Just because it’s available doesn’t mean everyone is entitled to it. Again, if Taiwan were more developed, it is more likely average Taiwanese parents can afford these amenities by virtue of the empowerment of capitalism like American parents were (before Obama), but Taiwan isn’t quite there yet and is dependent on charity. This is just economic reality.


#14

The sad part is that the clerk would likely have to pay for the stolen items. Otherwise, why resist? Let the thief take the stuff.


#15

[quote=“jotham, post:13, topic:158317, full:true”]
You’re going on subjective arguments now. I’m just looking at economic law, which is imperial everywhere on earth, no matter what nation, no matter what era.[/quote]
All hail Jotham, Slayer of Pirates, Mother of Dragons, Eternal Master of Objectivity! :notworthy:

How much economic aid does Taiwan receive?


#16

You what now?

“more developed”?

Trump just unilaterally decided that coal-mining companies are at liberty to dump whatever shit they want into the Appalachian waterways. True, Taiwan ain’t much better, but at least things are moving in roughly the right direction, as opposed to backwards.

And exactly what ‘charity’ is Taiwan dependent upon? This is a country that’s, what, number five(?) on the world ranking of foreign currency reserves.


#17

No it wasn’t unilaterally, it was in a legislative bill, which Trump signed. And it wasn’t going backwards either, it was one of Obama’s last acts and was enacted in January this year, so everything is back to normal, where it was before.

There are already statutes and regulations in place that address this. Obama was just making it more specific, stringent and actually impossible to fulfill because he was aiming to get rid of the industry, it was his war on coal.


#18

One step forward, one step back. Result! :thumbsup:

Such as?

It seems a bit unlikely that Obama would have spent a shitload of time and money on duplicating something that already existed. Possible, I suppose, but unlikely.

Trump promised to make America great again. Locking the country into a technological backwater that was obsolete 50 years ago, for another 50 years, is not going to make the country great. He just betrayed the voters. Ah well - at least he’s treading a well-worn path, eh?


#19

Really, this is much more appropriately left to the states than the federal government. The state of West Virginia is more lax on environment because otherwise no one would have a job, and only people to suffer for it is West Virginians. Deciding these issues locally is much more efficient, they can weigh the advantages and disadvantages better than federal cookie-cutter regulations across the nation.


#20

We still want to know about economic aid (or “charity”) to Taiwan, Mr. Objectivity. :slight_smile: