Salaries likely to rise as government encourages collective bargaining
Updated: 2008-04-12 16:00

China is launching a systematic effort to support ordinary workers to bargain for salaries with their employers.

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The All China Federation of Trade Unions (ACFTU), the national labor organization with a membership of 169.94 million people in 2007, released its plan to promote the collective bargaining in more industries and regions.

The mechanism would allow trade unions or labor representatives to take the lead in appealing for salary rises and directly negotiate with employers until the two sides reached a plan.

"We would promote the negotiations of reasonable salaries, bonus, allowances and subsidies," said Sun Chunlan, ACFTU vice-chairperson, at a meeting on Thursday.

The idea to solve salary disputes through organized negotiation was introduced by the former Ministry of Labor and Social Security (now the Ministry of Human Resources and Social Security), which issued a tentative measure in 2000.

"The employer and the workers are equal in raising suggestions and have the same veto power," it said.

The promotion of such a practice, however, has been hindered by the lack of legislative support and the diversified situation of both public and non-public enterprises. In addition, the growing number of job seekers gave employers far more leverage than the workers in bargaining labor prices.

"And trade unions in many private companies are established by the business owners and are affiliated to the company. Therefore, they are unable to effectively bargain salary rises for the workers," said Xu Xiaojun, a professor from China Institute of Industrial Relations who specialized in trade union study.

"Unreasonable salaries have become a major problem causing social conflict in the Chinese labor market."

ACFTU Vice-chairperson Sun Chunlan said it would explore and try to solve existing problems in promoting salary negotiation.

Authorities in Shanghai issued a detailed plan in March to promote such practices. It aimed to establish the bargaining mechanism in 75 percent of state-owned enterprises and 60 percent of non-public enterprises with trade unions this year. The plan would expand the number of laborers covered in the mechanism by 10 percent.

In March, a salary negotiation in Hua Yue, an adhesive tape producer in Hebei Province with more than 700 employees, lifted workers' annual minimum salary by 1,860 yuan ($265). Experienced workers enjoyed a higher increase.

According to data from the National Bureau of Statistics, per-capita disposable income was 13,786 yuan in urban areas last year, up 17.2 percent, or 12.2 percent in real terms. Per-capita income was 4,140 yuan in rural areas, up 15.4 percent, or 9.5 percent in real terms.

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