Economic minister sees growing trend towards private sector pay raises

By Alan Fong,The China Post with CNA

The China Post with CNA — About three in every 10 businesses are considering or planning to increase salaries, signifying a growing trend favoring pay hikes in the private sector, Minister of Economic Affairs Shih Yen-shiang (施顏祥) told lawmakers yesterday. Appearing at a legislative hearing, Shih cited results of a survey done by the Ministry of Economic Affairs in January showing that over 30 percent of Taiwan’s enterprises are willing or planning pay raises. Among them, more than half are already planning or preparing the hikes, the Central News Agency pointed out.

The current situation should favor pay raise even more compared to January as the economy is continuing to improve, he added. Small and medium businesses in Taiwan wish the government would take the lead in pushing for an across-the-board pay raises in Taiwan, he said. Top government officials have recently been championing a proposal to raise salaries for public servants by 3 percent. Shih was commenting on a remark by Roscher Lin, chairman of the National Association of Small and Medium Enterprises, on Wednesday that businesses seemed to be “forced to raise salaries” by the government’s pay raise plan. It is not possible for the government to force businesses to increase pay through legislation so it can only persuade the private sector to handle the matter, Shih said, adding that the government respect completely the final decisions by individual businesses. Douglas Hsu (徐旭東), head of the Far Eastern Group, yesterday expressed hope of seeing public sector pay raises this year, adding that the rumored hike rate of 3 percent for the public sector is “kind of low”. Businesses belonging to the Far Eastern Group have offered higher pay raises this year, although at varying rates, he said. Civil servants haven’t received pay raises in years, “they have had a tough time,” he said. The survey done by the job bank reveals similar results to MOEA’s investigation that about one third of local businesses are planning pay hikes. About 31 percent of private businesses are going to give raises, averaging at 4.06 percent. In these businesses, 26 percent will raise salaries in a fixed rate across the board while increases in 72 percent of enterprises will be based on individual performance, found.

The remaining 69 percent said they are not going to increase salaries, citing reasons mainly around the line that it is not their policy to give regular annual raises, their profits were not good enough or that pay raises had been given last year. In a TV interview late Wednesday, Premier Wu Den-yih outlined the government’s proposed source of funding for the raise, which he assured would not be financed by additional debts or by sacrificing other items in the budget. Part of the money will come from better-than-expected profits by state-owned enterprises in the steel making, telecommunication and financial sectors and part from increased tax revenues. Wu yesterday reiterated that the government has not yet decided to go ahead with the pay raises. While conceding that the central government has to pull off some tough balancing act in its 2012 annual budget, Wu stressed that the government cannot wait until it clears the debt that the nation has built up in the past sixty years before offering pay raises, or else civil servants will have to wait for decades.