China Times Editorial (Taipei, Taiwan, ROC)
June 28, 2016
Executive Summary: We hope all sectors of society, including labor organizations, will remain calm. We hope they will revert to normal, rational labor management negotiations. The old saw about "Labour and management are in the same boat" may be trite. It may sound too high-minded. But it is undeniably true. If labor demands more than management can afford, then businesses will fail, capital fill flee, and labor itself will suffer. The result will be a lose / lose / lose scenario for employers, employees, and the nation's economy.
Full Text Below:
The chain reaction touched off by the China Airlines flight attendants strike is accelerating. Seven major business organizations are blasting the government for reneging on its promise not to add seven more legal holidays. Yesterday they held a press conference to announce the "suspension of all negotiations with the government and labor organizations”. Labor organizations showed up to protest. Labor and management clashed head on. The situation spun out of control. Premier Lin Chuan mouthed platitudes, urging the two sides to “empathize with each the other's position”. Taiwan is riven by divisions between labor and management and between advocates and opponents of pension reform. The new government has made one complete policy about face after another. It has cavalierly reneged on its commitments. It has raised social antagonism to a new level. Ensuring a 1% growth rate this year was already difficult. Now the economic prospects are even gloomier.
Traditionally the business community has always supported the government. Seldom has it sung a different tune. This is the first time in history seven business organizations have issued a joint declaration suspending all negotiations with the government. This is unprecedented, and reveals the anxiety, even anger felt by entrepreneurs.
The business community has suspended negotiations with the government and labor organizations. Labor and management previously reached an agreement providing for two-day weekends and seven additional legal holidays that were only commemorative in nature, and which involved no down time. Ostensibly the business community is protesting the DPP government's abrogation of this agreement. In fact, legal holidays were merely the fuse. The business community was already uneasy about the deteriorating business environment. The legal holidays issue was merely the last straw.
If the issue were legal holidays, the government would not have a leg to stand on. First, the agreement was the result of negotiations between labor and management. The government promised to honor the result of the negotiations. Second, two day weekends, plus legal holidays, plus vacation days, adds up to 126 days. This is one day more than even military personnel, civil servants, and public school teachers receive. It is quite a lot, even in Asia. To the business community, adding seven more legal holidays was obviously going too far. The new government reneged on its policy commitment, merely because a few labor organizations protested and petitioned. Obviously the business community considered this unacceptable.
The more important reason however, is that its heart of hearts, the business community no longer trusts the new government. Ever since the DPP came to power, all its actions have worsened investor confidence and business incentives. President Tsai promised to improve the business environment by addressing the business community's “five needs”. Leave that aside for the moment. Consider instead the power supply, one of the issues the business community is most concerned with. The new government has apparently been hijacked by “nuclear free homeland” true believers, and finds itself impotent to respond. Now, when temperatures rise, the standby transfer capacity falls to 3%, and the shadow of power rationing looms. The new government's timetable for the replacement of nuclear energy with renewable energy, is nowhere to be found. The business community is deeply concerned about the cross-Strait “cold confrontation". The MTA and STA remain blocked. They watch helplessly as Taiwan's trade status is marginalized and export competitiveness are lost. How can the business community not be concerned, not to mention furious?
The EPD has even proclaimed that "Environmental protection will no longer be a neglected child bride". It intends to terminate mineral rights, further discouraging investors already wary of EIAs and other obstacles to investment. Last week, during the China Airlines strike, public sector shareholders caved in to all of labor's demands. President Tsai took the lead, siding with labor. Leave aside the justifiability of the strike for a moment. This successful strike against a publicly owned business has terrified the business community. It is worried that strikes may spread, making survival for already troubled industries even harder.
The government must realize that only healthy economic development can provide provide new jobs and increase wages for young people. None of these objectives can be achieved without the business community. The most important concerns for the business community are sustainable growth and sustainable investment. Sustainable growth preserves existing jobs and economic returns. Increased investment ensures more increased employment opportunities and increased economic output.
The new government has proposed several industrial policies, including a "five creative industries plan”, and an "Asian Silicon Valley Plan". But if the domestic investment environment deteriorates, and the business community has no desire to invest, none of these proposals will succeed. The government cannot achieve these plans. even if it can raise the funds. Put plainly, the government lacks the talent and ability to achieve these goals. If the business community lacks confidence in the economy and the investment environment, industry will scale back, and private capital will evaporate. Taiwan's economy will suffer heavy losses, and its future will be jeopardized.
Seven major business groups have announced the suspension of all negotiations with the government and labor organizations. The government must consider honoring the original agreement. It must not complicate the matter further. Only this can resolve the short-term issues on the table.
Nor can it ignore the business community's unease with the government's policies. The two most critical policies are energy policy and cross-Strait policy. The government must offer credible, workable policies instead. When dealing with labor disputes, the government must remain resolute, and offer sound policies. Otherwise private investment will plummet.
We hope all sectors of society, including labor organizations, will remain calm. We hope they will revert to normal, rational labor management negotiations. The old saw about "Labour and management are in the same boat" may be trite. It may sound too high-minded. But it is undeniably true. If labor demands more than management can afford, then businesses will fail, capital fill flee, and labor itself will suffer. The result will be a lose / lose / lose scenario for employers, employees, and the nation's economy.