Govt seen moving to close yawning wage gap

09:33, July 23, 2010      

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Su Hainan, vice director of the China Association for Labor Studies. Photo:Xinhua

Authorities appear determined to launch a milestone reform to improve income distribution later this year, amid recent intensive coverage of the theme by State media following a series of labor disputes.

Income distribution and social security system reforms are expected to be implemented in the second half of the year, an article published on the website of the National Bureau of Statistics said Wednesday.

The article came on the heels of a report by Economy and Nation Weekly on Tuesday, which said that a "wage-doubling plan" would be included into a draft of the income distribution reform, although no timeframe for such an initiative was yet available.

The plan proposes that workers see their wages doubled in five years, according to reports.

However, Su Hainan, vice director of the China Association for Labor Studies, who was allegedly behind the proposal, denied the report.

He did note, however, that the government has to carry out a series of economic plans to ensure the synchronous rise of GDP and people's incomes in an effort to contain the widening income gap.

Su said he proposed an initial plan to double citizens' annual income in the next five years on the condition that national GDP could experience rapid growth.

"If laborers' annual income could rise by 15 percent every year, they could get possibly receive a doubled income on an annual basis," he told the Global Times.

Lin Xinqi, director of the Human Resources Department at Renmin University of China, told the Global Times that "The issue is not about how much pay increase the workers are expected to receive in five years, as any increase of wages could be offset by climbing prices.

"It is about creating a long-term mechanism," he said.

In May, an article published in the overseas edition of People's Daily commented that China is faced with a growing income gap and an accompanying sense of social inequality despite steady growth since the 1980s of the average national salary.

In an article published in April in Qiushi magazine, Premier Wen Jiabao said greater efforts were needed to build a rational income-distribution structure.

"If the income gap continues to widen, it will pose a major threat to our economic development and social stability," Wen wrote. "We are poised to and capable of gradually resolving this problem with a sound momentum of economic and social development and greater sustainability in various fields."

China's 30 years of booming economic development have generated huge wealth. But uneven distribution is seen as a contributor to rising social problems and weakened domestic demand.

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