Taiwanese Workers Have Shown Us How to Gain Ground in the Neoliberal Era

Taiwan’s working class has been able to make significant gains in recent decades despite the pressures of economic liberalization. That’s because its unions have received crucial support from a wider network of social movements and advocacy groups throughout the country.

Student protests in Taiwan in March 2014. (Flickr / Wikimedia Commons)

The global labor movement is facing headwinds on many fronts, and Taiwan is no exception to this rule. Yet the island nation’s labor movement has been able to make steady progress in terms of legal protection and a fairer distribution of income in recent times. How can we account for this success?

One key factor has been the support for Taiwanese workers from a wider network of social movements and advocacy groups. This has created the space for working-class gains even at a time when the pressures of deindustrialization and offshoring have been making it harder for organized labor to impose itself on employers.

A close study of the Taiwanese example could offer some important lessons for labor activists in how to advance their struggles for rights and redistribution during the neoliberal era.

Decline and Revival

“Enterprise unions” — previously known as “industrial unions” — are the most active sector of unionized Taiwanese workers, although there are far more workers in “occupational unions” — 2.72 million as of 2021. Due to the relocation of factories to China and Southeast Asia, the number of enterprise union workers had dwindled from 692,579 in 1991 to 520,947 in 2010. However, a major reform of labor union regulations reversed the decline by kindling a new wave of organizing, and the membership figure climbed back to 599,316 by 2021.

On the other hand, the number of temporary and dispatch workers without regular terms of employment was on the rise until 2019, reaching a total of 621,000. But a major revision to the Labor Standards Act then strengthened the legal obligations of employers and sent this trend into reverse, with the figure dropping to 588,000 by 2021 — a return to the 2014 level.

Three administrations have presided over Taiwan since the new century began, those of Chen Shui-bian (2000–08), Ma Ying-jeou (2008–16), and Tsai Ing-wen (2016–present). Under these successive presidents, the average annual rate of growth for the minimum wage was 1.1 percent, 1.9 percent, and 4 percent, respectively. Taiwan’s minimum wage regulation was particularly important for the most hard-pressed sections of the working class, such as part-time and unskilled workers. Its increase thus helped mitigate income equality.

The share of gross domestic product (GDP) going to Taiwanese employees reached its zenith in 1992 (53.5 percent), then steadily declined to 45.3 percent by 2010. It has since begun to rise again, reaching 47.4 percent by 2019. In short, the above figures reveal a steady, if moderate, trend toward improved conditions for the working class in Taiwan.

Expanding Rights

In addition, while workers in most countries have experienced a retrenchment in welfare and protection due to globalized, race-to-the-bottom competition, the legal entitlements of Taiwanese workers are progressively expanding. The state first introduced unemployment benefits for involuntarily dismissed workers in 1999 and later codified them in 2002.

This was followed by a new labor pension scheme in 2005, replacing the previous system that was available only to a small fraction of workers who had worked in the same company continuously. In 2009, workers became eligible for parental leave allowance, and they were also able to claim their old-age benefits from labor insurance in the form of a monthly pension, rather than a lump-sum payment — a more beneficial arrangement with life expectancy increasing.

In terms of industrial relations, governments have stepped in to protect workers’ rights. Starting in 2011, “unfair labor practices” that involved discriminatory treatment of union workers and their representatives were outlawed. In 2018, a new Labor Incident Act was enacted to provide an alternative, more labor-friendly conflict-resolution mechanism alongside the existing channels of mediation and litigation.

It should be said that these reforms were often the result of hard-fought compromises that failed to satisfy the full demands of labor advocates. For instance, the benefits from the new labor pension scheme fluctuate with the performance of financial markets. As such, it has a weaker redistributive effect among different income earners, and workers cannot know the amount they will receive before their retirement.

Moreover, some reform achievements have involved quid pro quos in other areas, as was the case with two controversial incidents of shortening working hours. After reducing the legal number of working hours from forty-eight to forty-two per week, the government allowed employers more flexibility in calculation to reduce their labor costs in 2001.

In a similar fashion, while attempting to establish a general right for workers to two days off per week, the government authorized shorter rest intervals and a different approach to calculating overtime in 2018. Nevertheless, instead of retreating in the face of market forces, Taiwan’s state has been expanding its reach and regulation in favor of workers.

The Democratic Transition

Taiwan’s workers are not known for their militancy, unlike their South Korean counterparts. Yet they have managed to resist the downward trend of neoliberal flexibilization more effectively. While irregular workers consistently make up more than 40 percent of the South Korean labor force, the figure has never exceeded 10 percent in Taiwan. How has Taiwan’s labor movement been able to make progress without resorting to confrontational tactics?

Like other countries that experienced the so-called third wave of democratization, Taiwan’s labor movement emerged in the context of a transition away from authoritarianism. From the late 1940s, the island had been ruled by Chiang Kai-Shek and his Kuomintang party, who had lost the civil war to Mao Zedong’s Communists on the Chinese mainland. In the name of anti-communism, Taiwan was under martial law for thirty-eight years between 1949 and 1987, with street protests, opposition parties, and strikes all prohibited.

From the mid-1980s, this began to change. Taking advantage of the liberalized political atmosphere, dissident workers organized new unions or took over the ones previously controlled by the ruling party. They demanded the implementation of rights guaranteed by the Labor Standards Act, which had been enacted in 1984 but not translated into practice. The nascent labor agitations of the late 1980s and early 1990s chipped away at authoritarian control in the workplace and in the structures of labor unions, speeding up the country’s march toward democracy.

Analysts have used the term “social movement unionism” to describe the enlarged role played by labor activism during democratic transitions. Taiwanese labor leaders embraced a broader understanding of their mission: they saw rank-and-file workers not only as union members, but also as citizens with a vital stake in the ongoing political struggle.

In fighting against the Kuomintang government, Taiwan’s labor movement cadres either forged an alliance with the main opposition party, the Democratic Progressive Party (DPP), or formed their own political parties. They also collaborated with other sectors of civil society, such as student activists.

Taiwan’s working class thus played an important role in the great transformation from authoritarianism to democracy. Yet it has not received the attention it deserves from international scholarship on Taiwan, probably because it lacked leaders with the stature of Poland’s Lech Wałęsa or Brazil’s Lula. Too often, observers saw its less militant style of protest as a sign of weakness or inability to make changes, which was emphatically not the case.

A Shrinking Base

Throughout the 1990s, Taiwan’s labor activists continued to make progress in many policy areas. In 1994, as the government was implementing national health insurance, workers obtained a fairer contribution ratio due to their protests. In 1996, they achieved a milestone victory by extending the protection of the Labor Standards Act to two million white-collar workers.

Taiwan experienced its first peaceful exchange of power in 2000, with the DPP’s Chen Shui-bian winning the presidential election to end more than half a century of Kuomintang rule. The DPP’s rise to power resulted in the legal recognition of the Taiwan Confederation of Trade Unions (TCTU) as a national federation, giving organized labor access to the decision-making process.

While Taiwan’s labor activism had long sought the TCTU’s incorporation, its actual performance did not live up to expectations. In its first few years, TCTU leaders took part in some tripartite meetings and successfully advanced labor’s legislative agenda. Yet its political influence waned over the years, for a number of reasons.

Internally, the federation’s intensely competitive elections aggravated the already fractious landscape of Taiwan’s labor unions. On several occasions, the losing fraction mounted a walkout in protest. By the time that the TCTU elected its second president in 2003, it had become a pale shadow of its former self, since many founding member unions had chosen to leave.

There were more daunting challenges on the external front. Political democratization opened up space for workers’ collective action, but economic liberalization simultaneously closed down such opportunities. As Taiwan experienced the combined challenges of offshoring, industrial upgrading, and postindustrialization, the number of workers who joined enterprise unions actually shrank.

The termination of martial law in 1987 also saw the lifting of a ban on investment in mainland China, which soon became a relocation magnet for Taiwan’s labor-intensive industries. While Taiwan managed to retain high value-added industries on its own territory, such as chip-making foundries, it was difficult for unions to organize these high-tech workers.

Taiwan crossed the threshold of a postindustrial society in 1992, as the number of workers in its tertiary sector now surpassed those in manufacturing for the first time. Although many white-collar workers ended up in the career blind alleys of convenience stores, retailing outlets, and catering, they were largely reluctant to join a union.

Enterprise union membership thus became an increasingly rare privilege among the better-off sections of Taiwan’s working class — usually those who worked in state-owned enterprises, recently privatized ones, or large private enterprises. Tellingly, as of 2022, all seven TCTU presidents hailed from state-owned enterprise unions.

The narrowing of the movement’s organizational base meant that it struggled to represent Taiwan’s working class as a whole. The period between 1997 and 2006 period was a nadir for Taiwanese labor, with the legal minimum wage remaining at the same level for ten years while living expenses soared. Yet TCTU leaders did not prioritize this issue, since hardly any unionized workers received the minimum wage.

Social Mobilization

Once Taiwan’s transition to democracy was completed, labor unions appeared to have lost their momentum. However, this organizational stagnation did not prevent the labor movement from making forward strides, for the following reasons.

First of all, Taiwan’s democratization gave rise to a vibrant civil society. While institutional union leadership teams were increasingly inward-looking and paid little attention to what was happening beyond their immediate constituencies, other activists took up the mantle of reform advocacy on social justice issues.

Youth activism became important, particularly since young people were disproportionately victimized by low wages. In 2005, a Youth Labor Union was set up: with its creative protests in fast-food restaurants and campus organizing, it played an instrumental role in securing the minimum wage hike of 2007, ending the ten-year freeze.

Taiwanese youth activism received a stimulus with the revival of the student movement in 2008. This culminated in the 2014 Sunflower Movement, a twenty-four-day occupation of Taiwan’s national legislature to oppose a controversial free-trade agreement with China. The dissatisfaction of young people with low wages and job insecurity had already been evident before that. Such economic grievances propelled waves of student and youth-led protests on a number of issues concerning urban development, the expropriation of farmland, media reform, and others.

The Sunflower Movement was a case study in how youth activists filled the vacuum left by an inactive union leadership. The free trade agreement aimed to liberalize investment and migration from China, threatening the livelihood of around six million service industrial workers in Taiwan. While young workers in the sectors of social work, health care, and publishing voiced their concerns by joining the protest, established unions, including the TCTU, appeared not to be much involved.

In fact, many union leaders felt intimidated by the call for a general strike from student leaders, although such a strike did not materialize. The Sunflower Movement leaders framed their opposition chiefly in the terms of procedural justice, with joblessness and other social justice issues taking a back seat.

In hindsight, the conspicuous absence of labor unions from Taiwan’s largest-ever episode of peaceful protest underlined the extent to which the established wing of the labor movement had become irrelevant to national debates.

Advocacy for Labor

In addition to youth activism, other social movements also emerged to address class-related issues. The housing reform movement came in reaction to the rising cost of accommodation fueled by property speculation. Due to its pressure, the government launched a project to increase the supply of social housing. The demand for “justice in housing” has become widely accepted among politicians, even though they are still reluctant to challenge the entrenched interests of developers.

Gender-related issues were traditionally marginal to the concerns of male-dominated union leadership teams. It was women’s organizations that spearheaded a campaign to ensure gender equality and zero tolerance of harassment in the workplace. In short, despite the narrow focus of union leaders, Taiwanese labor rights have continued to advance because of timely intervention from other movements.

Taiwan’s labor NGOs, which are primarily composed of intellectuals and ex–student activists, have continued to function as the policy brain for the labor movement. In particular, the Taiwan Labor Front (TLF), which originated from the pro-democracy opposition movement in 1984, has played a critical role in policy innovation.

In its earlier years, the TFL was directly involved in grassroots organizing and maintained branch offices throughout Taiwan. In the 1990s, it decided to embrace social democracy and concentrated on policymaking at the national level, as Taiwan’s independent labor unions became capable of standing on their own.

The TFL’s policy influence came from its close relationship with the DPP, as many of its former activists were appointed to executive positions for labor affairs, both at local and national levels. The TFL also maintained close working ties with some DPP lawmakers who hailed from civil-society organizations. In several major elections, DPP candidates invited TFL activists to formulate their platform on labor issues, thus facilitating its policy advocacy.

In 1999, the TFL published a book called Taiwanese Labor Demands, which basically outlined a plan for unemployment benefits and legislation to protect workers against mass redundancy and occupational hazards, most of which was implemented during the first term of the Chen Shui-bian administration (2000–04). Its 2016 New Blueprint for an Equal Economy also laid out the legislative agenda for President Tsai Ing-wen’s first term (2016–20).

To be sure, there were other labor NGOs which also engaged in the field of labor policy advocacy. Nevertheless, the TFL turned out to be the most important player because it was able to skillfully combine its insider status with professional expertise.

In conclusion, by riding on the wave of democratization, Taiwan’s workers managed to secure their basic rights of organizing and labor protection. However, the political dividends were soon exhausted, as adverse trends in economic restructuring and the institutionalization of unions constrained the movement’s further advance.

It was at this critical juncture that youth activists and other movement allies stepped in and jointly promoted an agenda for social justice. In addition, effective advocacy on the part of labor NGOs laid the groundwork for policy breakthroughs. As such, Taiwan’s labor movement has been able to stage a rebound in the recent decades, even though its grassroots union membership has suffered a secular decline for a considerable period of time.