Experts debate benefits, problems of China's rising wages

16:50, January 19, 2011      

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China's municipals cities and provinces, including Beijing, Chongqing and Jiangsu, recently announced plans to raise regional minimum wage standards after a nationwide hike in 2010. However, experts suggested that the adjustment should be based on various factors.

Starting from Jan. 1, Chongqing raised its lowest wage standard by 190 yuan (around 30 U.S. dollars) per month. Jiangsu province released its plan to lift the standard by 180 yuan per month.

Beijing also raised the minimum wage standard by 21 percent to 1,160 yuan, the second time within six months, but the plan encountered opposition from the city's political advisors and triggered heated debate.

Li Shaohua, a member of the Beijing Municipal Committee of the Chinese People's Political Consultative Conference (CPPCC), said he did not agree with the constant minimum wage adjustment, adding that many of the Beijing-based private companies, especially labor-intensive enterprises, were affected by the adjustment.

The debate revealed a dilemma: if minimum wage standards are raised, it will help improve the livelihood of the low-income group, but it will raise companies' labor costs, shatter performance and eventually hit the job market.

Given the positive outlook for China's economic situation as a whole, local governments may continue to raise minimum standards, predicted Su Hainan, director of the Labor and Wage Institute under the Ministry of Human Resources and Social Security.

Facing the possibility of rising wages, Li Shi with Beijing Normal University suggested that safeguarding employment should be kept in mind when considering a necessary wage hike.

"The employment issue is the key to solving the distribution problem. Unemployment has a far stronger impact on income than low wages," Li said.

He added that local governments should decide the range of the adjustment of minimum wage standards through research into the distribution scope of wages and the operation status of small and medium-sized enterprises.

By People's Daily Online


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