The complexity of the issue of labor in Taiwan’s society in the interaction with other social elements interaction with other social elements

In this labor market with low salaries and long working hours, the work week as stipulated by law has at least two meanings, as follows: One, the Basic Labor Law speaks of its purpose as being “to provide minimum standards for working conditions, protect workers' rights and interests” ²⁷. That is, by means of limitations on the minimum standards of labor, it assures that workers can continue to give a certain quality of work service while maintaining their physical

27 Labor Standards Act, Article 1.

and mental health. A second purpose is “strengthen employee-employer relationships and promote social and economic development”²⁸, that is, to assure an economic circulation with benefits for both sides in order to achieve sustainable survival for all elements of society, specifically by means of a market mechanism, negotiated between labor and capital, that determines the level of salaries.

From this, considering the current unbalanced situation of Taiwan’s labor market,

“long working hours” are the reason workers’ physical and mental health cannot be protected to allow them to sustain labor service; and “low salaries” are the reason the link in the chain of economic circulation through expenditures by workers is broken. In the end, will the social structure collapse?

Workers are a link in the circulation of the society’s economy. “Long work hours”

cause workers to lack the objective social requirements to make sufficient input of their income to economic circulation through consumer behavior. Likewise,

“low salary” also causes workers to subjectively be unwilling or unable to use their income in consumer expenditures that make input to economic circulation. This blockage of economic circulation to Taiwan’s private sector can be summed up in an old Taiwanese adage, “If there isn’t enough food to eat fresh, how can we put up any extra for the future by drying?” The effect could also be characterized as killing the chicken to get the eggs.

If in discussing the issue of working hours the repeated argument is that reforming working hours will cause the cost of labor to escalate²⁹, then that is intentionally ignoring that the consumer behavior of workers in their leisure time can produce an economic effect. The argument disingenuously reduces workers just to the product of their labor, under a regime of cost management. It is blind to the fact that in the hours outside of their working hours they have the potential to the consumers of others’ products. Through the economic result of shaving down workers’ incomes rather than allowing them a reasonable allocation, it unintentionally deprives them of the ability to consume the commodities of other enterprises.

This style of running enterprises with a short-sighted fixation on immediate profits might be simply chalked up to the selfishness of entrepreneurs, but that would be a simplification. If might rather be said that it covers up how the labor issue is connected with other elements in the economic society.

Taking Taiwan’s structure of enterprises as an example, according to the government’s 2015 White Paper on Small and Medium Enterprises³⁰, small and medium companies are the backbone of Taiwan’s industrial structure, and they number about 1.35 million, constituting 97.61% of all enterprises, and employing

28 Ibid.

29 Yang Xiwen and Song Yichang, “If labor recovers the seven days of vacation, the bosses say they will throw over the table”, CTS News, June 21, 2016. This report pointed out that the cost for all of Taiwan’s labor taking one day off would be a loss of about NTD$9 billion.

30 Ministry of Economics, Section on Small and Medium Enterprises, "2015 White Paper on Small and Medium Enterprises", September 2015.

about 8.67 million persons, i.e. 78.25% of employed persons. But small and medium enterprises account for only 29.42% of sales, and only 14.62% of exports.

In 2015 there were 93,000 new small and medium enterprises established. It is clear that the large majority of Taiwan workers are employed by small and medium enterprises.

And the bulk of revenue for small and medium enterprises is from the domestic market, that is, 87.38% of revenue; and domestic employment is dominated by workers with low salaries and long working hours. Every year there are over 90,000 small and medium enterprises established, but the total number increases by less than a quarter of the number of new establishments; by projection from statistics for 2014, this means that every year about 5% of small and medium enterprises go out of business. That implies that every year at least 459,000 workers find that their jobs are eliminated, or that they must seek new employment.

For these companies, going out of business may mean the owner has been operating the business inappropriately, or that there have been fluctuations in the economy and market; or it may be the case that the government has made adjustments or changes for transformation of industrial sectors; or the cause may even be the economic environment external to Taiwan³¹. However, the reason for their failure cannot be chalked up to the workers’ providing an insufficient supply of labor resources. All the same, for the workers, they must bear the burden of finding new employment or facing the risk of employment, due to the failure of the business.

Taking this discussion further, retooling for a new career is not just a matter that must be taken up for the individual worker who has been displaced from a job. In order to reenter a field of employment, a job-seeker may have to invest in new professor skills or continuing education. Moreover, under the pressure of daily survival, some job-seekers may have to accept lower pay or work conditions, in order to improve their likelihood of being employed; and related to this, workers in small and medium businesses that are still in operation will in the labor market face downward pressures on their salaries. Given that 5% of small and medium enterprises go out of business every year, this means that not only the workers in those enterprises must seek new employment, but that the magnifying effect produced by labor market demand-and-supply will affect many more workers than those in the 5% of enterprises that go out of business.

Because most of the income of the operators of small and medium enterprises comes from the domestic market, on one hand they must struggle for survival in the fierce competition of the domestic market with weak demand, and on the other hand they face the government’s fixation on GDP growth figures - the government favors large enterprises and rewards them with preferential investment policies.

31 An example of an external economic cause is the impact of China: In the two times that the Democratic Progressive Party has taken the presidency, China has quit talks on economic cooperation and has taken measures like decreasing the number of Chinese tourists going to Taiwan and limiting Taiwan products entering China, etc., in an attempt to cripple the Taiwan economy and industrial development.

This creates a system of competition among enterprises in which, just like the fluctuations in the labor market and the labor market system that workers face, operators of small and medium enterprises can only sigh, “We don’t have enough food to eat fresh, how can we possibly put up stocks for drying?”

Chart 1.2. : Number of small and medium enterprises

Year

Small and medium enterprises, number

Increase over previous year

New enterprises established in the year

Enterprises liquidated, estimated number

Percent of enterprises liquidated in year

2010 1,247,998 15,973 93,609 77,636 6.2%

2011 1,279,784 31,786 99,584 67,798 5.3%

2012 1,306,729 26,945 95,954 69,009 5.3%

2013 1,331,182 24,453 98,821 74,368 5.6%

2014 1,353,049 21,867 93,968 72,101 5.3%

2015 1,383,981 30,932 98,507 67,575 4.9%

2016 1,408,313 24,332 95,486 71,154 5.1%

2017 1,437,616 29,303 101,710 72,407 5.0%

2018 1,466,209 28,593 102,353 73,760 5.0%

Source: Organized by the author from the annual White Papers of the Small and Medium Enterprises Department, Ministry of Economics.

1.2.2. The limited participation of workers on the level of government