Giving workers regular and steady pay rises will sharpen companies'
competitiveness and quicken economic growth, a senior official said yesterday.
"Cheap labor has long been an economic advantage for our country," Qiu
Xiaoping, from the Ministry of Labor and Social Security said in a Web-cast on
the government's website (www.gov.cn).
"However, if average pay levels remain low or increase only slowly over a
long period, the economy will be damaged by the widening income gap, which will
stifle consumption and lead to a high trade surplus," he said.
Qiu said that in the long run, by paying staff decent wages, companies will
benefit from both technological advancements and by being more competitive.
Qiu expressed concern that the wage gap across different parts of the country
and within different industries was widening, despite recent figures suggesting
average annual salaries had risen.
He said statistics that pointed to rapid pay growth were misleading as they
hid the fact that some low-income groups had received no such increments, and in
some cases had actually seen their wages slide.
According to the Beijing bureau of statistics, in 2006, the average annual
pay (before tax) of a Beijing worker was 36,097 yuan (about $4,770).
However, almost 61 percent of workers earned less than that.
The figures also showed that workers in the security, banking, legal
services, shipping, civil aviation, oil and natural gas industries had the
highest average annual salaries (100,000 yuan and above), while those in the
garment and textile industries received an average of just 16,000 yuan.
Qiu said last year, local governments across the country introduced new
regulations on minimum wage rates in a bid to boost the salaries of the nation's
lowest paid workers.
Twenty-nine of the 31 provinces, municipalities and autonomous regions on the
mainland upped their minimum wage rates by an average of 30 percent.
In Shenzhen, South China's Guangdong Province, the minimum monthly wage was
increased to 810 yuan, the highest in the country.
Qiu said that as long as the terms of the minimum wage regulations were met,
as in any market economy, companies were then free to set their own pay scales.
However, the newly passed Labor Contract Law stipulates that all issues
concerning workers' direct benefits, including pay and work quotas, should be
agreed on through consultation between workers and management.
Qiu acknowledged that increases in the price of housing, medical services and
education over recent years had put extra pressure on families' finances and
negated pay rises to some extent.
According to the National Bureau of Statistics, the national average pay has
achieved annual double-digit growth over the past four years, faster than GDP
growth over the same period.
Xia Yeliang, a professor of economics at Peking University, said pay
increases stimulate consumption among low-income groups much more than among
high-income earners, who effectively energizes the market and promotes economic
Liu Bingquan, a researcher with the Institute of Labor Studies in Beijing,
said maintaining steady pay growth should be a basic policy during the current
period of economic transformation.
(China Daily 07/18/2007 page4)