Understanding Taiwan’s Migrants

Over the past 35 years, there has been an ongoing rise in one particular demographic group in Taiwan. Their presence has become increasingly integral to the economic engine as well as daily life. The narrative is framed as if they come to Taiwan for work; yet, from a different perspective, it’s also true that Taiwan needs migrant workers to fill these roles. How does Taiwan tackle the increasing demand? The first step is to grasp the underlying necessity.

Currently, there are over 790,000 migrant workers in Taiwan. Around 500,000 people are serving in the manufacturing industry while more than 240,000 individuals work in social welfare, primarily as domestic workers. Taiwan is largely in need of migrant laborers in these two sectors. In the manufacturing industry, migrant workers make about 1 in 5 of the workforce, representing 17.6% of all workers. Approximately 80% of long-term care services in social welfare rely on migrant workers. Nowadays, migrant workers are coming from Indonesia, Vietnam, Philippines and Thailand with about 70% of the workforce comprising Indonesian and Vietnamese workers. 

The history of foreign migrant laborers in Taiwan  

Looking back to the start of migrant recruitment, Taiwan’s need for foreign workers emerged in the late 1980s when the business sector faced the challenges of labor shortage, particularly for the traditional manufacturers. Before, the export-oriented policy of the 1960s promoted labor-intensive industries and led to two decades of economic prosperity. When the development started shifting toward the information technology industry, the transition posed an enormous challenge for traditional manufacturing. First, companies had more difficulties in finding labor because the local workers began to seek jobs in the service sector instead of factories. The change in labor structure was attributed to the higher educational level as well as economic development. On the other hand, following the lifting of martial law in 1987, the appeals for better working conditions were strongly voiced through the active social movements. The awareness of labor rights was on the rise and the local workforce looked for alternatives than the traditional companies. 

Additionally, the foreign exchange market was another factor exerting pressure on the business’s operations. The 1980s marked the debut of an increase in the foreign currency rate, which put a great deal of weight on the export industry. For a long period of time, the export trade was benefiting from the low exchange NTD-USD rate to sell the products in the international market. Once the value of the New Taiwan Dollar rose, the trend significantly affected the profits of the export business. Many small and medium-sized enterprises (SMEs) decided to close down because of the rising cost in operation. Some big companies decided to move offshore in search of cheaper production costs and the drop in the balance of trade became a great concern. The Taiwanese government was compelled to offer incentives for the company to remain in operation. 

During the same period, a number of Southeast Asian countries had been exporting labor in order to alleviate their domestic unemployment pressure and economic growth difficulties. The Taiwanese government began to permit the hiring of foreign workers on a limited basis in certain industries. As a result, the need for labor in Taiwan’s local labor market was satisfied by the influx of foreign workers. The policy later expanded the scale in the hiring quota and sectors, successively opening up to the Philippines, Thailand, Indonesia, and Malaysia. 

Not matching international norms 

Generally speaking, at the time the labor shortage was triggered by the change in the labor structure; rather than an expansion of the economy and rising demand, it was due to Taiwanese workers shifting to the service sector but manufacturers refused to raise their wages. Recruitment of migrant workers helped to sustain the operation of labor-intensive businesses at the existing low cost, owing to the workforce supply from the Southeast Asian countries. The policy taken at the time to address the need was primarily economic in nature. 

Given this approach, the mentality lying in the policy gave little thought to the circumstances of workers. Migrants in Taiwan have consistently been seen as a “temporary” and “supplementary” workforce without much concern on labor rights and conditions. The difference was recognized at the outset of the legislation that foreign workers serving in labor-intensive and low-skilled functions are in the categories different from other jobs. There is a strict inspection procedure in place during the hiring process in the name of preventing crime and disease transmission. 

Until today, migrant workers are still required to pay a tremendous amount of recruitment fee, or charged with the monthly service fee from their agencies. In the work contract, the restriction on freedom of seeking other employment directly deprives the right of migrant workers to negotiate with employers. Many regulations are not aligned with international standards. The flaws existing in the policy gap are the major concerns for labor protection.   

Today, Taiwan plays a key role in the international supply chain. Legislative developments in recent years have strengthened regulations on multinational corporations, with a particular focus on analyzing the harm that occurs to workers in the supply chain. Attention is focused on issues such as recruitment fees and associated costs, workers’ health and safety, and other biased restrictions.

However, there remains a substantial gap in meeting international standards in terms of practices on the ground. In 2021, the US implemented an import ban on products made with forced labor, supported by the Uyghur Forced Labor Prevention Act (UFLPA), to prevent the entry of goods produced under exploitative conditions. This issue was highlighted again this year in the U.S.-Taiwan Initiative on 21st Century Trade, ensuring that trade practices align with ethical labor standards. In the EU, the Corporate Sustainability Due Diligence Directive (CSDDD) was passed in April 2024. The law is designed to require businesses to adopt more rigorous due diligence and sustainability practices. Within three to five years, EU member states must incorporate the law into their domestic legal frameworks, and suppliers doing business with EU-based enterprises must adhere to the regulation. Local manufacturers in Taiwan will soon be obligated to comply with the international standards imposed on overseas clients. 

Demographic challenges

From another perspective, the evolving demographic profile also brings challenges in labor recruitment. Taiwan already officially became an aging society in 2018, and those over 65 years old made up over 18% of the overall population this year. The decline in the working population is causing even further increase in the demand for foreign workers. 

Nonetheless, Taiwan is not the only country in the region who is facing the challenge of an aging society and a shortfall of workforce. Korea and Japan are facing the same situation. In 2019, the Japanese government rolled out the policy to allow migrant workers with over five years of work experience in Japan to qualify for permanent residency. The reform lifted the distinction between low-skilled worker and high-level professionals and provided opportunities for long-term employment. 

Acknowledging the necessity for a foreign labor force, the goal is not only to recruit more people abroad but also provide more motivation to come. In Taiwan, migrant workers are permitted to stay for up to 14 years. Unlike other foreign workers, they are not eligible for permanent residency under the immigration legislation. If the policy for temporary and supplemental recruitment remains unchanged, the approaches will conflict with long-term needs.

As Taiwan continues to demonstrate the effectiveness and resilience of the democratic path, the policy itself should reflect the core values of inclusivity, fairness, and respect for human rights. The demand for migrants has only increased, which underscores the urgency of reforming migrant policies to address the need. Migrants in Taiwan often face a complex web of legal, social, and economic hurdles that can shape their experiences and impact their well-being. By refining its migratory strategy to better support and integrate newcomers, Taiwan will not only enhance its commitment to democratic values but also foster a more inclusive and cohesive society. 

(Featured photo by Angela Hsiao)