Dirty work
Professor Hsueh Cheng-tai of National Taiwan University's Labor Institute outlines the sequence of events that led to the current situation. Ever since the 1960s, with the spread of universal education and rapid expansion of the service sector, young people have increasingly steered clear of employment in labor-intensive industries, especially shunning jobs in the "3D" trades (involving work that is dirty, dangerous and difficult). It was in the mid-1970s, with industry yet to fully upgrade and the proportion of people working in manual jobs rapidly falling, that foreign laborers began arriving in Taiwan in numbers, overstaying their tourist visas and working illegally. In 1989, needing to overcome the shortage of labor available for national infrastructure developments, the Executive Yuan approved a package of measures legalizing the presence of overseas workers on these and other important projects. Subsequently, as other sectors began to suffer from a dwindling supply of labor, it became necessary to introduce further provisions governing the employment of overseas workers, and in 1992 the Employment Service Act was passed. Foreign workers began streaming into Taiwan, and rapidly came to account for a significant chunk of the labor market.
Chiu Jing-yan, manager at Chun Mu Machinery Mfg. Co., a hydraulic machinery maker in Chiayi, says that 10 to 15 years ago when you advertised a vacancy, there was sometimes no reply for a couple of months. In spite of limited personnel requirements, the operations of a small factory can be seriously hindered by any difficulty recruiting new workers. It was only once the government began allowing in foreign labor that recruitment pressure at Chun Mu began to ease.
According to a senior executive at Formosa Plastics, that corporation employs over 2,000 foreign laborers, not including those who work for subcontractors. This has made a big difference for the company in terms of fulfilling its manpower requirements for the recent construction of Taiwan's sixth naphtha cracker plant.
According to statistics from the Council for Labor Affairs (CLA), there were more than 291,400 foreign laborers in Taiwan at the end of October, comprising workers in the manufacturing and construction sectors, domestic helpers, caregivers and fishing crews (see piecharts).
Despite the size of the foreign workforce, Lin Tsong-ming, director general of the CLA's Employment and Vocational Training Administration (EVTA), views the importation of foreign labor as a matter of expediency, providing a source of supplementary manpower rather than substituting for existing supply. But labor groups take a different view.
Kuo Kuo-wen, secretary general of the Taiwan Labor Front, believes that even though the government describes the importation of foreign labor as supplementary, the policy has at times amounted to labor substitution. He cites the example of the Employment Service Act, which permits high-tech industries to import foreign labor as a way of encouraging major investments. The effect of allowing foreign labor to be imported for manufacturing investments worth over NT$200 million is to hand much-coveted jobs in the high-tech sector to workers from overseas. Says Kuo: "In terms of job opportunities, it is aborigines who are worst hit." Unemployment averages around 3% in Taiwan at present, but among aborigines the rate is 10%, and reaches 30% in urban areas. On May 1 this year, International Labor Day, over one thousand aborigines took part in a demonstration dubbed "The March of the Army of Aborigine Unemployed," to protest against job losses to foreign laborers.
Says Kuo, "Such a level of mobilization among aborigines was unprecedented, and shows how badly they have been affected in terms of job opportunities."
As well as taking jobs from the market, low-cost foreign labor has had a big impact on average wages in the 3D industries. According to Hsin Ping-lung, a researcher at the Chung-Hua Institution for Economic Research, wages for foreign laborers are currently around 70-80% of what local workers are paid. This is a competitive advantage that has given some employers the idea of recruiting local workers on foreign-labor wages, with the result that there continues to be a serious labor shortage in spite of relatively high unemployment. Hsin points out that while aborigines used to earn over NT$2,000 for unskilled day labor, it's now sufficient to offer around NT$1,000, and there will still be a rush of applicants.
Lin Tsong-ming confirms that there have been cases of employers squeezing wages in this way, but not many, and he encourages people to report them. The CLA now makes it mandatory for companies to declare fair terms of employment and restricts the ratio of foreign to local employees. Also, the CLA only approves the recruitment of a foreign worker once the company has copied relevant correspondence to the union for confirmation that no local worker wants the job.
Not long ago it was reported in the papers that certain employers, aiming to cut down on wage bills, were testing prospective employees for English-language proficiency, even though this was totally irrelevant. Some aborigines who applied were said to be "gobsmacked" by the requirement. The EVTA hopes that unscrupulous employers who resort to such dodges will be reported by the public.
Foreigh Labor in Taiwan by Industry Foreign Labor in Taiwan by Nationality Total no. of foreign workers: 291,437 Data courtesy of EVTA, CLA Graphic by Tsai Chih-pen.