Minimum Wage to Rise Next Year: Over NT$30,000 Increase Announced – CIPO Warns of Greater Pressure on Traditional Industries and SMEs

The Minimum Wage Review Committee of Taiwan's Ministry of Labor concluded its meeting this afternoon (24th), finalizing a 4.745% increase in the minimum monthly wage effective next year (2027). In response, the Commercial and Industrial Promotion Association (CIPO) issued a statement acknowledging the government’s balanced approach in supporting workers’ livelihoods while sustaining economic growth. However, CIPO cautioned that recent economic expansion has largely benefited technology sectors such as AI, resulting in a pronounced K-shaped recovery. Service, traditional, and small-to-micro enterprises have seen limited growth and now face mounting pressures from rising wages and operating costs—posing severe challenges for low-margin, labor-intensive industries and SMEs.

According to the Ministry of Labor, the revised minimum monthly wage will increase from the current NT$29,500 to NT$30,900—an uplift exceeding NT$30,000—with an increase rate of 4.745%. The hourly rate will also rise from NT$196 to NT$205.

CIPO expressed appreciation for the government’s attempt to balance worker welfare and economic sustainability, respecting the committee’s decision. It recognizes that moderate increases in basic wages help maintain workers’ quality of life and allow broader sharing of economic gains.

Nevertheless, CIPO highlighted that although Taiwan’s economic performance over the past two years has been impressive, growth has been heavily concentrated in high-tech sectors like AI and semiconductors, clearly exhibiting a K-shaped pattern. Meanwhile, service sectors, traditional industries, and SMEs have experienced minimal growth and are simultaneously grappling with rising costs of raw materials, energy, and personnel.

CIPO emphasized that raising the minimum wage not only increases base salary expenses but also drives up related labor costs, including labor and health insurance premiums and retirement contribution obligations. If businesses face simultaneous spikes in wages and other operating costs within a short period, the operational burden will become significantly more severe—especially for low-profit-margin, labor-intensive industries and SMEs.

CIPO stressed that minimum wage adjustments must equally prioritize two core objectives: 'protecting workers' and 'ensuring sustainable business operations.' Only when enterprises remain financially stable can they expand investments, sustain job creation, and further improve employee compensation—ultimately achieving a virtuous cycle where both labor and management share in economic prosperity.

CIPO noted that Taiwan’s industrial structure is diverse, with significant differences in profitability and labor cost ratios across sectors. Therefore, minimum wage adjustments should primarily be based on the Consumer Price Index (CPI), which reflects actual inflation and living cost fluctuations. GDP growth rates, however, should not be directly factored into wage adjustment calculations. Applying broad macroeconomic performance uniformly would place unbearable burdens on traditional industries and SMEs with limited profit margins.

Furthermore, CIPO urged the government to complement minimum wage adjustments with concrete support measures for SMEs, such as funding for digital transformation, technical upgrading, and preferential financing. It called for comprehensive policy packages that address the real-world difficulties faced by different industries, enabling both employers and employees to co-create sustainable economic growth within a stable business environment.