What you need to know
Taiwan is a wealthy country. Its recently instituted minimum wage hike does not compare favorably with its international counterparts.
Taiwan’s minimum wage has just increased to NT$25,250 a month. Now that we have entered a new year, let’s examine how Taiwan’s increase compares with the increases in International Monetary Fund-designated advanced countries.
The minimum wage of Geneva, Switzerland is nearly five times as high as Taiwan while hospitality workers in Norway and Denmark earn minimum wages about 3.5 times as high as Taiwan. Most other Western European countries have minimum wages about two to three times that of Taiwan. South Korea and Japan have minimum wages 1.9 and 1.6 times that of Taiwan, respectively.
While Eastern European countries had minimum wages only half that of Taiwan just a decade ago, their minimum wages are now almost or already on par with Taiwan.
Comparing long-term minimum wage growth among advanced countries, Eastern European countries and South Korea have seen the fastest growth in their minimum wages since 1995, while Taiwan has seen one of the slowest growths.
Estonia, Lithuania, Latvia, Slovakia, and the Czech Republic have increased their minimum wages by 22.7 times, 18.7 times, 12.6 times, 7.9 times and 7.4 times, respectively. South Korea’s minimum wage is seven times what it was in 1995.
Taiwan’s minimum wage is only 1.7 times its 1995 level.
The minimum wages in the Netherlands, Belgium, France, Japan and the United States all generally increased at around the same slow pace. But when we look at this in terms of nominal minimum wage, their minimum wages are all higher than Taiwan’s. The Netherlands, Belgium and France have minimum wages more than twice as high.
Since 1995, the monthly minimum wages in the Netherlands, France and Belgium have grown by the equivalent of NT$24,560, NT$22,088 and NT$19,307, respectively, while Taiwan has only seen growth of NT$10,370.
The nominal increase in Taiwan’s minimum wage is even lower than in Eastern European countries where minimum wages are lower to begin with.
Let’s look at countries with minimum wages close to that of Taiwan in 1995. New Zealand has increased its minimum wage by nearly NT$50,000, South Korea has increased it by NT$40,072, Slovenia has increased its minimum wage by close to NT$30,000, while Spain has increased its minimum wage by more than NT$20,000.
More useful comparisons factor in the cost of living. According to Numbeo’s Cost of Living Index, Taiwan has the lowest cost of living among the set of countries in which minimum wage growth has been slower.
But it is not the case for other basic necessities. Taiwan has the world’s most expensive milk and one of the highest costs of bottled water.
Taiwan’s housing prices are also one of the highest in the world — higher than the other countries in this comparison at 8th most expensive in the world.
If Taiwan’s minimum wage is to be commensurate with its cost of living, corresponding to that of comparable countries, Taiwan’s minimum wage should be between NT$30,000 and NT$50,000.
Japan and the U.S. have a cost of living similar to Belgium, the Netherlands and France, and their current minimum wages of about NT$30,000 are also insufficient.
An adequate minimum wage for Taiwan would therefore be pegged to Belgium, the Netherlands, or France.
With the New Year has come a new minimum wage. But I hope this is not an occasion for celebrating an achievement. The above charts show how far Taiwan has to go to match international standards for similar economies. Taiwan’s workers deserve better.
TNL Editor: Nicholas Haggerty (@thenewslensintl)
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