Minimum wage raised in 26 provinces, cities in China

January 19, 2014 Leave a comment

Minimum wage raised in 26 provinces, cities in China

Staff Reporter 

2014-01-18

Twenty-six provincial level governments in China have raised the minimum wage for their workers, with an average growth of 18% according to a Jan. 15 report by the Beijing-based Economic Information Daily.China’s Ministry of Human Resources and Social Security said that more details of the plan will be made public later.

The paper reported that the minimum wage in Beijing, Zhejiang, Henan, Guizhou, Shanxi, Shandong, Jiangxi, Guangxi, Gansu, Ningxia, Tianjin, Shanxi, Shanghai, Guangdong, Yunnan, Xinjiang, Sichuan, Jiangsu, Jilin, Liaoning, Anhui, Fujian, Hunan, Hainan, Shenzhen and Inner Mongolia has been raised as of Dec. 31, 2013. The minimum monthly wage in Shanghai is now US$216, while the minimum hourly wage for a blue-collar worker in Xinjiang is US$2.

The ministry said that the average growth of the minimum wage among these 26 areas is about 18%. The average growth of monthly paychecks among Chinese companies in 2013 was 8.5%, lower than the 11.6% growth in 2011. The ministry also said that the income gap between management level and entry-level employees is shrinking.

“Over the past five to 10 years, many Chinese firms have been expanding their businesses to the global market, and increasing management level paychecks,” said Xu Wenzong, head of the Greater China branch of US professional services firm Towers Watson. “The margin for more growth for high-ranking employees will be limited, but the margin for lower-level employees is still large.”

Zhang Chewei, deputy head of the Chinese Academy of Social Science’s Population and Labor Economics Research Institute, said that the increasing minimum wage is a sign that the nation’s economy is still growing.

Zhang, however, also warned that the increasing minimum wage is also a warning sign for most Chinese companies. “It also means that ‘cheap laborers’ will no longer be a national resource,” Zhang said.

Filed under Macro Trends

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