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Govt aims to close income gap with wage hike

By Chen Xin (China Daily)

08:32, February 09, 2012

BEIJING - The government aims to raise its minimum wage at least 13 percent each year from 2011 to 2015, according to a national employment promotion plan released on Wednesday.

China raised its minimum wage by an average of 12.5 percent annually during the 2006-10 period, official figures showed.

The plan issued by the State Council stipulates that the minimum wage should be lifted to at least 40 percent of the average Chinese citizen's salary by 2015.

The proportion of the minimum wage to the average salary varies in different places, ranging from about 20 percent to 30 percent, according to Yang Yiyong, director of the social development research institute under the National Development and Reform Commission.

In Beijing, the minimum wage is 1,260 yuan ($200) a month, and in downtown Chongqing municipality, 870 yuan.

Liu Junsheng, a researcher with the labor and wage institute affiliated with the Ministry of Human Resources and Social Security, said a continuous rise of the minimum wage would most benefit low-income workers.

In many places, including more-developed coastal regions, many enterprises, especially small-and medium-sized ones, do not have a complete wage distribution system and still set workers' wages at a level meeting or slightly higher than the minimum standards, he said.

"The minimum wage increase of more than 13 percent each year will help increase the money in workers' pockets and will also be conducive to an elevation in the level of their social security," said Liu.

China's social security system ensures that the higher salary an employee earns, the more social security funds will be deducted from one's salary, meaning a higher pension after retirement. But there are upper limits that vary in different places.

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Canada at 2012-02-0970.36.49.*
It is so good to hear China is raising wages.My union fought for across the board increases [example: 50 yuan per hour increase for everyone covered by the collective agreement], and fought against percentage increases, because percentage increases benefit the highest paid workers most, and increases the wage gap between the lowest and highest paid workers. Also, if the union is fighting for the same increase for everyone - example 50 yuan per hour increase for everyone, then it is harder for the employer to buy certain groups of workers off by paying a few workers more, and getting approval for the collective agreement by the lowest possible majority. However, I also recognize it takes time to arrive at an appropriate wage rate for the different jobs. In my plant, by design, there was only a fairly small gap between the lowest and highest paid jobs.

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