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Taiwan union protest over economy has legitimate foundation

Publication Date : 24-10-2012

 

Union members announced yesterday that they will stage a demonstration on October 28 against recent Taiwan government policies that they claim do not help the economy, oppress labourers and please only business owners.

Union members said that the government is incompetent in dealing with the economic downturn. The only method the Cabinet knows for creating economic growth is helping private enterprises exploit labourers. Worker representatives argue that the recent delay of the minimum monthly wage hike and the easing of the restriction on foreign labourers will return Taiwan to what it was 30 years ago, when the economy was sustained by cheap labour.

Union members also questioned the government's move to encourage Taiwanese businesses in mainland China to come back and invest in Taiwan. These businesses rely on cheap labour in mainland China to turn a profit.

The members warned that since private enterprises in Taiwan are already accustomed to paying low salaries to their employees, the strong ties between businesses and the government may lead to further exploitation of workers if no one takes to the street to voice disapproval.

The union also said that their protest is not only for the benefit of workers, but also for the benefit of the country, so that it may not suffer from simple-minded policies which lack long-term considerations.

Interestingly, this time the claims of union members find their foundations in right-wing economics.

Economists do not always consider economic downturn an outright negative outcome for society. Instead, economic downturn is a challenge for private enterprises. During economic crises, companies that are less competitive leave the market, while those that can adjust remain. As a result, the economy as a whole becomes healthier. When the economic condition improves, the performance of these remaining companies will be stronger.

When the economic condition in Taiwan started to deteriorate, government officials, portraying themselves as professional and well-versed in economics and finance, implemented policies that are not quite in accordance with the economic mindset noted above. The minimum wage hike was delayed and companies that depend on cheap labour to return to Taiwan were welcomed. So, it is easier for companies in general to remain in the market. Thus, some perceive the government as helping companies stay that would otherwise be forced to leave.

Furthermore, what the government did is contradictory. The government set a long-term objective to transform the country into one that does not rely on cheap labour. As the economic condition became gloomy, the government, however, created more favourable conditions for companies relying on cheap labour.

Government officials should bear in mind that the wage level of Taiwan is not as low as it used to be and cheap labour is no longer a competitive edge for this country. Local people are unlikely to benefit from the increasing investment of companies counting on cheap labour because they are bound to hire labourers cheaper than local people, which might drag down the wage level of Taiwan and make people poorer. The long-term strategy of the government to transform Taiwan should be the first priority.

Furthermore, the government should stand firmly for this long-term goal without compromising to the demands of private enterprise. Such a firm stance taken by the government will send a message to companies that they have to adjust themselves to the rising personnel costs, not lobby government officials to open a door for them to hire cheap labourers.

The government's actions highlight its short-sightedness. The only effect of these measures are better-looking government statistics, which might be the most important thing for incumbent politicians but which jeopardise the long-term strategy of the government.

Although the claims of demonstrators are sometimes dismissed by those in power, the claims of union members in this coming protest deserve attention. The government should change its attitude and start listening attentively to its people because citizens are not as ignorant as government officials might perceive.

 

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