TAIPEI (Taiwan News) — The Ministry of Labor (MOL) raised the monthly minimum wage by 4% following calls by labor groups for a 5% hike.

The Minimum Wage Act (最低工資法) went into effect earlier this year. The ministry held its first minimum wage review following implementation on Wednesday (Sept. 4). 

This is also the first minimum wage review during President Lai Ching-te's (賴清德) term and the decision to hike pay marked the ninth consecutive year of increases.

During the meeting, 21 committee members agreed to raise the minimum monthly wage next year from NT$27,470 (US$855) to NT$28,590, an increase of 4%. It raised the hourly minimum wage from NT$183 to NT$190, a 3.8% hike.

MOL will submit the proposed pay hikes to the Cabinet for approval and then announce their implementation. The ministry estimates that about 2.57 million workers will benefit from the pay raise.

Before the meeting, Tai Kuo-jung (戴國榮), Taiwan Confederation of Trade Unions general secretary and a review committee member, said Tuesday (Sept. 3) the increase should be more than 4%, per CNA. He reiterated on Wednesday that raising the minimum wage is only the first step in driving overall wage increases. 

Tai argued that a minimum wage should meet the basic needs of disadvantaged working families. Tai called for pay hikes to continue reflecting the Consumer Price Index (CPI) and ensuring the fruits of economic growth are shared. 

Tai said to solve the labor shortage problem, Taiwan should increase the overall wage."If wages are not increased, talent won’t come," Tai commented.

Labor rights groups held a press conference before the review meeting, calling for a minimum wage increase of no less than 5%, from NT$27,470 to NT$28,844. It asked for a baseline formula for adjustments to prevent wage increases from falling short of expectations.

Before the meeting, Ho Yu (何語), director of the Chinese National Federation of Industries, said that while global price fluctuations justify an adjustment to the minimum wage, Taiwan's wage purchasing power remains strong. However, Ho added that since this is Lai's first year in office, he would support the president in adjusting the minimum wage.

Yu Yu-chih (余玉枝), a representative of the Taiwan Federation of Industry, noted that while the first quarter was stable, the second quarter saw a decline. The outlook for the third and fourth quarters is not promising, Yu added. He said next year could be even worse and suggested that decisions should be based on the global economic situation.

Chiu I-che (邱一徹), a representative of the Chinese National Association of Industry and Commerce, cited a report from the Chung-Hua Institution for Economic Research listing a pessimistic economic outlook for the second half of the year.