ACFTU: SOE senior Executives earn 18 times higher than grassroots workers

17:34, March 10, 2010      

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Zhang Shiping, committee member of the All-China Federation of Trade Unions (ACFTU), recently released a special survey of the income of workers, partly based upon analysis of the annual reports of listed enterprises. Statistics show that the average income of senior executives is nearly 18 times as much as the income of grassroots workers in 208 state-owned enterprises (SOEs), and 20 percent of workers have not enjoyed a pay increase for 5 whole years.

Zhang said that the ACFTU had conducted a special investigation into the income of workers last year, and found 5 major problems.

Problem 1: low-income workers occupy a large proportion, and are mainly made up of grassroots and migrant workers.

Data shows that the average monthly income of surveyed workers is 2,152 yuan, 88 percent of the average monthly income of urban workers in China. Of the workers surveyed, 67.2 percent earn less than 2,152 yuan monthly; 17.3 percent earn around 1,000 yuan a month; and 4.8 percent earn only several hundred yuan, less than the minimum wage according to law.

Problem 2: serious income distribution inequality
The workers in some industries are paid on average 4.77 times higher than those in other industries in 2008, and some even reach 10 times. According to analysis of the annual reports of listed enterprises, senior executives in 208 SOEs earn on average 17.95 times higher than the grassroots workers, while in 2006, it was only 6.72 times.

Problem 3: labor disputes, especially those caused by wage problems, witnessed a large increase.

14.4 percent of the workers experienced unpaid wages in 2009, up 10.3 percentage points compared to 2007. Nearly 60.2 percent worked overtime, especially in labor intensive and private enterprises where they respectively had to work for 51.8 and 53.16 hours on average per week. 37.6 percent did not receive any overtime pay or failed to receive overtime pay in the full amount. Furthermore, labor disputes caused by wage problems amounted 519,000 from January to September 2009, accounting for 36.4 percent of the total.

Problem 4: China's social security system is imperfect because the pension and medical care insurance coverage rates for urban employees stand at only 62 percent and 60 percent respectively

Meanwhile, central SOEs dominate over 90 percent of shares in the enterprise annuity market. This means that they have further expanded the income gap between their employees and those of other types of enterprises by offering enterprise annuities, a type of supplementary insurance.

Problem 5: Irrational investment and consumption structure

The income growth rate is lower than economic growth rate

Between 1997 and 2007, government revenues as a percentage of GDP increased from 10.95 percent to 20.57 percent and corporate surplus rose from 21.23 percent to 31.29 percent, while labor remuneration of workers dropped from 53.4 percent to 39.74 percent. Between 2002 and 2009, China maintained an average annual growth rate of 10.13 percent, while the average annual inflation-adjusted growth rate for workers' wages was 8.18 percent, with the wages of 23.4 percent of workers remaining unchanged within a 5-year period. Zhang said that inflation and the rise in housing prices over recent years have caused the actual living standards of some workers to be lower.

"A survey shows that 61 percent of the workers who responded believe that low incomes for ordinary workers are currently the greatest inequality. Chinese workers are a major contributor to China's reform and opening up as well as its modernization, which U.S.-based Time magazine has even acknowledged," Zhang said using a higher voice. She suggested that the "Regulations on Wage Payments" should be issued as soon as possible in order to detail the scope, standards and procedures of wage payments. "Criminal Law" should be revised as soon as possible to specify the legal liabilities of those who have escaped because of the default of wages, the judicial interpretation of the "Labor Contract Law" should be perfected and the law enforcement surveillance and labor inspection should be strengthened in order to safeguard workers' rights in wage allocation.

By People's Daily Online
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