Taiwan's migrant worker policy sparks debate

Hsia Cun-yi is busy sifting through job listings at an employment centre in the factory city of Taoyuan.

It has been five months since the 44-year-old factory worker was laid off.

He has worked in factories all his adult life, but despite having years of experience under his belt, he says it's becoming increasingly difficult to find a job, not least because of the influx of foreign workers.

"The employers prefer to hire migrant workers because they can pay them less, and they're willing to work longer hours," he says.

Mr Hsia's views reflect the worries of many of Taiwan's workers.

Tough times

The government recently decided to allow companies to hire more migrant workers, raising the limit on foreign workers at a firm to 40% from the previous limit of 35%.

With the relaxed rules, some 80,000 more migrant workers could come here adding to the 450,000 that are already working in Taiwan.

To add to the concerns of Taiwanese workers, it is also considering a dual track salary system where migrants can be paid lower than the minimum wage, which critics say will only make it tougher for locals to find jobs.

This is the latest issue facing Taiwan's workers.

Over the past three decades many Taiwanese manufacturing companies moved much of their operations to China to take advantage of low labour costs there.

That has resulted in the loss of hundreds of thousands of factory jobs here.

The impact of that shift so far has been cushioned somewhat by the decision of some of these firms to keep manufacturing of higher end products in Taiwan, not least to protect intellectual property rights and guarantee quality standards.

But now, there are fears that even those jobs may also be lost, not to factories in China, but to the the growing number of South East Asian migrant workers.

Not enough workers

For its part, the government says the change is to encourage Taiwanese firms, who had shifted operations abroad, to return to their home base.

According to some estimates, labour costs in China have risen by an average rate of between 12% and 15% annually over the past five years.

The authorities are hoping that by letting more migrant workers in, and allowing factories to pay them lower rates than the minimum wage, they will be able to attract some of the firms - who are now starting to see their costs in China go up - back to Taiwan.

It may also help keep some manufacturers, who are thinking of shifting out, in Taiwan.

Sun Race Sturmey-Archer Inc which makes bicycle parts for clients all across the globe is one such firm.

It wants to expand its manufacturing facility in Taiwan but says it has become difficult to find locals who are willing to take up a factory job.

There have been various protests in Taiwan in recent days over labour policies

Alan Su, the firm's chief executive, says he pays his staff more than the minimum wage of 18,780 Taiwanese dollars ($650; £400) but the locals are not too keen to join the company.

"Taiwanese society has changed over last two decades. They do not want to work in factories, and they do not want to work overtime and often blue collar jobs are looked down upon," he says.

"If you are a factory worker, it may be difficult for you to find a wife. The image is not very good."

Mr Su is in fact of the opinion that the government needs to relax its rules on migrant workers even further, especially the one that makes it mandatory for manufacturers to hire five local workers for every one migrant worker.

His firm currently employs 24 migrants from Thailand, its maximum quota. It would like to hire another 20 migrants, but in order to do so, it has to hire 100 local workers - something he says is impossible.

He says his firm needs to remain competitive, and will be forced to move its operations abroad if they can't hire more migrant workers.

"As China's cost has risen significantly in the last decade, companies are looking to move back to Taiwan, but when you cannot find the workers to meet your demand, then you are forced to go to Cambodia or Vietnam to cover that need."

Retrain and re-educate

Some analysts say that allowing in more migrants is also necessary because of Taiwan's rapidly aging population and low birth rate.

"The aging population and shrinking population means you'll run into acute labour shortage problems," says Tony Phoo, chief economist at Standard Chartered in Taipei.

"If you do not adequately address such a deficiency in the economy, it will hurt Taiwan's economic growth over the long term."

However, he warns that when it comes to low-cost manufacturing, Taiwan will continue to face competition from its regional neighbours and that it is inevitable that some low-end manufacturing jobs will be lost in the near future.

He says the government needs to focus on finding ways to improve the skills of Taiwan's labour force to ensure that workers, especially those made redundant, remain employable in the long run.

"If they are able to retrain, re-educate, move workers on, Taiwan can maintain its competitiveness," says Mr Phoo of Standard Chartered.

"These measures need to be put in place. They definitely can do more in helping these low skilled workers."

Perhaps, the likes of Mr Hsia may be better served by stifling through the pages of a training manual rather than through job listings.