Running a store together as a married couple

The issue of low wages for domestic workers has recently sparked considerable discussion. The causes identified in various discussions include the ineffective transformation of Taiwan’s industrial structure, businesses operating through price-cutting competition by lowering labor costs, generally low wages in the service industry, the devaluation of educational credentials due to an oversupply of graduates, workers’ insufficient bargaining power regarding wages, and the anchoring effect of the NT$22,000 wage level.

While most discussions have focused on industrial structure and labor-market factors, some market observers have examined the causes of low wages in Taiwan from the perspective of social attitudes and culture. Many businesses in Taiwan are family enterprises. On the one hand, they may lack sufficient funds to pay high salaries; on the other hand, when designing compensation packages, some family businesses may be more inclined to consider the interests of family members, resulting in relatively lower salaries for other employees. Public opinion has also criticized Taiwanese business owners for being stingy with money, treating employees more like “workers” than “partners,” being less willing to provide sufficient training or help employees grow, and believing even more strongly that there is no need to pay higher wages. These values stem mainly from Taiwan’s long-standing culture of careful frugality, especially in family-run businesses.

For example, market observer Chen Zhendong noted that in Taiwanese family businesses, family members often occupy senior management positions. In particular, executives at Taiwan-listed companies are frequently major shareholders: they pay themselves high salaries and arrange for family members and relatives to serve as executives and receive high pay. To answer to shareholders, however, they must suppress entry-level wages in order to maintain profit levels. He therefore believes that executives’ self-interest, which leads to an unequal distribution of wages, is one reason for Taiwan’s low wages at the grassroots level.

For another example, according to the “Table of Economic Growth Rates and Factor Income Shares of Gross Domestic Product Over the Years” published by the Directorate-General of Budget, Accounting and Statistics, the proportion of Taiwan’s GDP accounted for by compensation of employees fell from over 50% in 1992 to 44.9% in 2020 over the past 25 years. During the same period, the proportion accounted for by operating surplus rose from 30% to 34%, showing that corporate profits did not flow into employee wages. In response, media worker Peng Xingzhu pointed out that business owners profit but are unwilling to share generously; the money all ends up in the pockets of business owners and major shareholders, making Taiwan’s distribution of wealth even more unequal!