to: Summary Page
The presidents of Taiwan and South Korea both propose shorter workweeks
“Taiwan President Ma Ying-jeou announced plans to reduce the work week and restrict unpaid leave as he battles slower economic growth, in a move the opposition said was a campaign ploy ahead of January elections.
The government proposed cutting the work week from 84 hours every two weeks to 40 hours a week, according to a statement posted on Ma’s website after he met representatives from 10 labor unions yesterday. The proposal would also make it harder for companies to put employees on unpaid leave.
Ma, whose lead in opinion polls over opposition candidate Tsai Ing-wen has disappeared in recent weeks, aims to stimulate a slowing economy and lower unemployment that rose for the first time in five months in October, to 4.3 percent. Taiwan’s weekly work hours are high compared with other nations and the moves are a logical response to slower growth, said Cheng-mount Cheng, a Taipei-based economist with Citigroup Inc.
“ The proposed changes to the labor policy are reasonable and beneficial to both employees and employers,” Cheng said. “Any political party in government would have to come up with such strategy if faced with similar issues.”
The 61-year-old president, who leads the Kuomintang party and faces voters on Jan. 14, joins politicians from Hong Kong to Thailand who have sought to boost pay to alleviate the impact of price pressures. Countries including Singapore and South Korea introduced a five-day work week in the last decade.
A Nov. 22-Nov. 24 poll by the China Times News Group said Ma had support of 40.7 percent of voters compared with 40.3 percent for the Democratic Progressive Party’s Tsai. The poll, which had a margin of error of 2.9 percentage points, gave People First Party’s James Soong 10 percent support.
spokeswoman for the opposition Democratic Progressive Party
said that by introducing new plans Ma is trying to divert
KMT spokesman Charles Chen said such criticism isn’t valid because the vows were made before a global economic slowdown took hold.
“ The president has already apologized for not being able to achieve the target of a jobless rate of lower than 3 percent as pledged,” Chen said.
Ma’s proposal would make it easier to apply for unemployment benefits, according to the statement, while the government plans to increase subsidies for people under 45 to learn a second skill, as well as retrain older workers.
Under the Labor Standard Act, the legal number of work hours every two weeks is 84, meaning employees often work six days on alternate weeks. Government workers have been on a five- day work week since 2001.
“ The impact will be very marginal to the employees, though it will affect employers’ flexibility in arranging work schedules,” Francis Cheung, a senior strategist at Cred Agricole CIB in Hong Kong, said in a telephone interview. “There won’t be a negative impact on the business environment or increased costs for employers.”
The new rules will add restrictions on companies looking to put workers on unpaid leave. As of mid-November, 48 companies had asked 5,021 workers to take time off as demand falls, according to Ma’s government.
Lin Ming-che, secretary-general of the Trade Union of Electrical, Electronic and Information Workers in Taiwan, said the government data didn’t accurately reflect the true number of employees put on unpaid leave and the new regulations could help make such practices a last resort.
“ The government can help ensure that unpaid leave won’t be abused by some firms trying to cut costs,” Lin said in a telephone interview.
Taiwan’s economy expanded 3.42 percent in the third quarter from a year earlier, the worst performance since the third quarter of 2009. The government said in July it will increase the minimum monthly wage for the second straight year on Jan. 1, by 5 percent to NT$18,780 ($617), and the hourly wage to NT$103 from NT$98.
Taiwan raised minimum pay by 3.47 percent for 2011, the first increase since 2007, after the island’s income disparity widened to the most in almost 10 years.
“ President Lee Myung-bak suggested Wednesday that large businesses should cut the working hours of their employees to create more jobs.
“ Lowering working hours at conglomerates will enhance employees’ quality of life, create more jobs and help increase consumption,” Lee said during a regular meeting with senior presidential secretaries, according to spokesman Park Jeong-ha.
His remark came as the labor ministry is considering tightening regulations on the work week as part of efforts to reduce the total hours of wage earners and consequently create more jobs.
The Ministry of Employment and Labor now plans to include working hours on holidays and weekends as part of legally permitted overtime and will soon form a task force to discuss the issue with related bodies.
Currently, the nation has adopted a mandatory 40-hour, 5-day work week, and employees are paid extra for overtime, which are legally limited to less than 12 hours per week. It means an individual worker should work only 52 hours per week by law.
But overtime on holidays and weekends is not subject to this law and many employers abuse the loophole.
“ Overtime on holidays and weekends is not included as part of legally permitted additional working hours,” said an official from the labor ministry. “That results in much longer working hours in reality than allowed.”
The plan to regulate time spent working on holidays and weekends will decrease overtime and consequently help create more jobs, he said.
“ Just stopping some 500 firms from forcing their employees to work longer hours than permitted resulted in creating some 5,200 new jobs last year,” he said.
The government has taken various steps to reduce working hours at all levels in order to enhance the quality of life.
Working hours have fallen steadily every year since the introduction of the mandatory 40-hour, 5-day work week in 2004 for companies with over 1,000 employees. It was expanded to all companies last year, regardless of the number of workers.
But the country still remains at the top of the list for the number of working hours among members of the Organization for Economic Cooperation and Development (OECD). In 2010, South Koreans worked an average of 2,109 hours, much longer than the OECD average of 1,749 hours.
According to the Korea Labor and Society Institute, 2.41 million workers or 13.8 percent of all employees work over 52 hours per week. Those in companies such as Hyundai Motor are known to work over 3,000 hours per year.
Laborers welcome the government’s move to reduce the total amount of working hours.
“ We are in favor of the government’s plan,” said an official from the Korean Confederation of Trade Unions. “But there should be a measure to support those who have no choice but to perform overtime due to low salaries.”
Employers expressed concern over the plan, citing the increasing financial burden.
“ The plan came as a shock. Employees will ask for subsidies because of a reduction in their salaries due to the fewer working hours and we aren’t sure how to cope with this,” the Korea Employers Federation said in a statement.
Comment: In the United States, the shorter-workweek proposal is thought to be almost irrelevant to discussion of employment issues. Those economists and others who have driven the U.S. economy into the ground are so sure of themselves and their “lump-of-labor fallacy”. What a pleasant surprise, then, to find the presidents of two Asian nations that have become economic power houses advocate reductions in the work week. Admittedly, these nations, especially South Korea, are catching up with the rest of the industrialized world with respect to reduced working hours. However, the trend is in the right direction.
Can you imagine President Obama or any of his Republican opponents propose reducing work time in the United States?
to: Summary Page