Rumor: 5-Member Unions? Absurd Demands Accepted by Lai Administration

The government is considering amending the Labor Union Act by lowering the threshold for union formation from the current 30 members. While government agencies have denied rumors that the number will be reduced to five, a reduction is now inevitable. This change is neither necessary nor beneficial to the economy or industries—and may even be harmful. The sole reason it is being pushed forward is due to U.S. demands, explicitly written into the U.S.-Taiwan Agreement on Trade (ART). The ART adds another example of agreements favoring the U.S. over Taiwan, further exposing the Lai administration’s false claim of a 'major negotiation victory.'

Under Taiwan’s current Labor Union Act, at least 30 employees must jointly initiate the formation of a union. This effectively excludes businesses with fewer than 30 employees, as it is nearly impossible to gather 30 employees to co-sign. Given that Taiwan’s economy is dominated by small and medium-sized enterprises (SMEs), of the 1.46 million businesses in Taiwan, over 1.43 million have fewer than 30 employees—meaning 97% of businesses are unable to form unions. The ART requires Taiwan to review its minimum threshold for union formation, aiming to increase unionization rates. While the exact number is not specified in the ART, recent reports suggest the U.S. is demanding a reduction to just five members. Nearly all industry experts and academics agree that such a change would severely impact SME operations, especially without corresponding adjustments to 'union duty leave' policies. The government denies the 'five-member' figure but refuses to clarify the actual number, though it has committed to completing the legal amendment within five years.

A strong union culture can be a double-edged sword. On the positive side, it enhances labor rights, wage protections, and consumer spending, helping to reduce income inequality. On the negative side, it increases operational costs, reduces management flexibility, and complicates labor and business management. Over time, these accumulated issues can degrade overall economic performance. A notable example is the decline of union power in the 1980s, when U.S. President Ronald Reagan crushed the air traffic controllers’ strike and UK Prime Minister Margaret Thatcher defeated the British miners’ union.

Therefore, yielding to U.S. pressure and drastically lowering the union formation threshold will undoubtedly harm businesses, industries, and the economy. As for laborers, international cases show that excessively strong and expansive unions ultimately damage enterprises and entire industries, leaving workers worse off in the long run.

Frankly, Taiwan’s current economic and social problems stem from severe industrial imbalances and widening income gaps. Externally, the tech war and the rise of AI have driven global demand for Taiwan’s semiconductor products. Internally, government policies and resources have long favored the tech and semiconductor sectors. These issues have nothing to do with the threshold for union formation. Lowering the threshold will not help Taiwan’s economic or industrial development, nor will it correct existing imbalances. It offers no benefit while introducing significant risks.

The legal threshold for union formation is unquestionably a matter of domestic policy. Whether a change is needed and how it should be implemented is best understood by local businesses and workers, not foreign powers. Yet this reduction is not driven domestically but directly ordered by the U.S.—and even comes with a five-year deadline. While the world may have grown accustomed to U.S. interference in other nations’ internal affairs and the imposition of American values, forcing a country to accept clearly 'harmful and self-defeating' conditions is indefensible.

Perhaps Taiwan can comfort itself—or engage in self-deprecating humor—by claiming that due to Taiwan’s weak union culture and lack of strong union traditions, even lowering the threshold to five members will not lead to significant union activity or real-world impact. Perhaps Taiwan can choose not to care—or ignore—the fact that this legal amendment is a form of U.S. interference in domestic affairs. After all, the ART is already filled with similar provisions: WTO rules allow Special Safeguard (SSG) measures on agricultural products, a key tool for Taiwan to protect its domestic agriculture, but the Lai administration has waived SSG for the U.S. Regarding public health concerns over U.S. beef, pork, and poultry imports, the ART demands Taiwan adopt 'U.S. standards as the basis,' effectively sacrificing sovereignty and oversight, and thus public health. This labor law amendment is merely 'one more example.' Coercive investment and procurement requirements are even more entrenched.

The next time the Lai administration loudly promotes the ART as a 'grand slam negotiation victory,' it should first reflect on how much Taiwan has sacrificed and how many absurd, unreasonable U.S. demands it has accepted.