Taiwan’s post-authoritarian democratisation and economic liberalisation have triggered the rise of autonomous labour organisations. The government, amidst a labyrinthine framework, is gradually losing control over trade unions and Taiwan is now at the beginning of “trias politica” – where labour and state began drifting apart.
Democratic consolidation of power and the advent of a multi-party system in the island nation was supported by workers who escaped the clutch of the ruling Kuomintang (KMT) and sided with the dangwai (‘outside the party’ democratic movement). Industrial relations in Taiwan was historically built on an ‘unholy’ dyadic relationship between the ruling party and the workers. Despite the earlier lifting of martial law, truly independent labour unions free from government control grew only after the KMT lost to the rival Democratic Progressive Party (DPP) in 2000, after which the autonomous labour movement gained real momentum in 2008.
Some Taiwanese scholars maintain that the rise of an independent labour movement is a by-product of the dangwai movement from which the DPP was officially founded in 1986. The DPP shared proximity with the Taiwan Confederation of Trade Unions, which remains the largest alternative to the KMT’s Chinese Federation of Labour. However, growing employment opportunities and rising income during the ‘Taiwan miracle’ years brought complacency among workers and the autonomous labour movement suffered throughout the 1980s.
By 1990 the KMT’s policy on SOEs’ privatisation caused formerly loyal workers to take interest in unions. The DPP formed executive government in 2000 and intended to score influence from playing the populist independence issue based on the historical divide between the native Taiwanese and mainlanders. However, independent unions refused to toe the DPP line. These actions eventually fragmented the working class beyond a binary segregation between DPP-aligned autonomous labour organisations and those faithful to the KMT.
The DPP’s betrayal of working class by supporting the privatisation of SOEs received wide criticism, including from labour sympathisers within the party. The DPP wanted to demolish the KMT’s power base by ending the regulated market economy and a large number of SOE unions were still controlled by the KMT. The DPP also projected itself as the defender and promoter of native bourgeoisie economic interests by endorsing a pro-independence stance and strong nationalist sentiment based on an exclusive Taiwanese identity. SOE privatisation was a means to pay off the local Taiwanese capitalists. Nevertheless, labour organisations liberated from the KMT’s control did not trust the DPP and maintained distance.
Entrepreneurs, service industry and home-based workers did not develop any sense of class-consciousness. Societal individualism prevailed and union density declined. Politically affiliated unions were the worst affected. The working class blamed the DPP government for economic miseries, but economic liberalisation was not within the DPP’s control as mainlanders reaped the benefits and Taiwan’s outward FDI was accumulated across the strait. Autonomous labour organisations scouted for other opportunities that would not rob their jobs in support of mainlander interests. ‘Mainland-phobia’ escalated as labour wanted to protect their jobs. The rift between pro-labour and pro-capital stances of Taiwan’s two largest parties widened out of proportion as the KMT advocated for unification and DPP for independence. Economic and political issues were engulfed in new identity lines drawn over an age-old ethnic divide.
After losing executive government to the DPP, the KMT quickly reversed its policy position on labour. While in opposition, it backed labour and combated DPP policies, campaigning for issues that it previously never allowed to be debated at Executive or Legislative levels. This about-face failed to gain the confidence of workers liberated from KMT control and instead the DPP consolidated labour power through grassroots mobilisation. The DPP targeted enterprise and industrial unions, focused on southern counties, and promoted the ‘anti-mainland nationalist’ character of its economic policies. The outflow of foreign investment from Taiwan to the mainland was a far more significant reason for disquiet amongst the working class than the privatisation of SOEs. Although the DPP was closer to independent labour unions while in opposition than during its earlier period of executive government, the KMT’s divisive labour policy reforms also had a significant impact on the labour union landscape by protecting workers’ economic interests. Even if there was a clear independence-unification supporter divide between workers, not every autonomous union sided with the DPP.
The DPP returned to power in 2016 under the Tsai Ing-wen administration. Tsai’s policy on the ‘2012 consensus’ stood for native Taiwanese cultural hegemony over mainlanders and unnerved the economy. Tsai was adamant in not accepting the ‘One-China’ principle, a stance that vexed Beijing. The mainland suspended cross-Strait exchanges and left Taiwanese firms and labour in despondence. The ‘independence or unification’ issue risked the working class’ economic interests as the DPP’s nationalist economic model almost failed to stand against the mainland-friendly KMT’s denouncement. As economic conditions worsened, independent unions distanced themselves from the DPP. Working class outrage rose alongside voter discontent towards multiple DPP policy flip-flops. Political analysts firmly believe that Tsai has to succeed in reclaiming trust from South Asian and Latin American investors as alternatives to the mainland to counter her critics. But will her policy position gain the support of the working class?
Weakening global trade, deteriorating wage rates, dwindling tourism, informalisation of employment, electricity deficits, and an irked Beijing all mean that rectifying Tsai’s labour policies is easier said than done. The DPP has another chance to prove its commitment to the labour cause but re-electing neo-centrist labour policies means workers will see more combative reforms. Political democratisation fulfilled its promise of delivering diverse perspectives but could not pledge widening industrial democracy as expected by labour voters.
Taiwan’s industrial relations were politically liberalised mostly when the DPP was in opposition. In other words, anti-incumbency influenced independent labour unions to sway DPP support during KMT rule, but this did not happen to the same extent when the DPP was in power. Therefore, in the 2016 presidential election, anti-incumbency might have played a critical role for average voters, but not for the labour voters. The DPP has no plan to stop fighting the KMT’s authoritarian labour policies and gather support from independent labour voters to remain in power except for Tsai’s rage for a ‘one country on each side’ position. Trying to put an end to Taiwan’s ‘China dilemma’ is severing ties between autonomous unions and the DPP government. As a result, the independent labour movement is at a crossroads. The DPP’s campaign for independence will reduce jobs as the mainland will curb exports and investment in Taiwan, whereas defending unification will rob Taiwanese jobs as the mainland friendly KMT will not hesitate to liberalise the economy so that the outflow of foreign investment increases alongside privatisation.
Santanu Sarkar is a Professor of HRM at the XLRI Xavier School of Management, Jharkhand, India.