Price hikes, unpleasant truths and presidential elections

The China Post news staff

The Ministry of Economic Affairs’ (MOEA) decision to cut benefits for Taiwan Power Corp. (Taipower) employees and to downsize its headcount sounded like a government appeasement of the angry public after an over-16-percent power price hike, but this is the smaller issue at hand. Since the benefit cuts and layoffs will mostly affect rank-and-file Taipower employees — people working in the power grids and on the streets to maintain the power network instead of the potential fat cat executives the people are truly angered by — these cuts could lead to a reduction in service quality. In this sense, the MOEA’s announcement might actually mean that people are going to pay more for less service.

Preferential electricity prices, one of the perks to be cut, are not uncommon for power company employees around the world, who are also generally well paid not necessarily because of a government conspiracy to reward its employees but simply because of the importance and hardship of their work. Not unlike miners and workers in the oil industry, a considerable number of utility professionals are highly trained and highly skilled people working in some highly toiling environments. If anything, ensuring good pay for the people who keep the lights on and the tap running is the smart thing to do. The cuts are response to a campaign against employee bonuses in utility companies at a time of price hikes. The argument is that it is intrinsically wrong for utility workers to earn a “performance bonus” if their companies are racking up losses. It is wrong, for example, for Taipower to take credit for “performance achievement” for merely reducing a fraction of its multibillion-TWD deficit.