The Beijing government announced Friday a plan to raise the minimum salary by 10 percent, as well as to increase subsidies paid to families living below the poverty line to combat the jump in utility costs.
From July 1, the minimum salary for city employees will rise from 730 yuan ($106) to 800 yuan, or 4.6 yuan per hour.
The monthly allowance for families living under the poverty line will climb 60 yuan to 390 yuan, the sharpest increase in the past nine years.
Also increasing is the city's employment insurance, job-related injury insurance and pension.
The move aimed to offset price increases in rice, vegetable oil and pork, an unnamed Beijing Municipal Civil Affairs Bureau official was quoted by Beijing News.
Although China's consumer price index (CPI), a main gauge of inflation, eased to 7.7 percent in May with the falling food prices, about 45 percent of people polled in a central bank survey conducted nationwide in June still thought prices were "unacceptably high."