Minimum wage to be increased as economy recovers

By Xie Jingwei (
Updated: 2010-01-26 16:58
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The minimum wage level is to be raised by at least 12 percent from February 1 in Jiangsu, the Department of Human Resources and Social Security of Jiangsu Province has announced.

The move heralds a wave of nationwide salary increases. Other regions including Beijing, Chongqing and Dongguan also look set to follow suit, according to today's Economic Information Daily.

Beijing may raise the minimum wage level on July 1, 2009, an official with the city's Department of Human Resources and Social Security revealed on January 24.

After the revision, Jiangsu's minimum wage level will climb to parity with that of the more developed Shanghai and Hangzhou. The highest monthly minimum wage in the eastern province will be increased to 960 yuan ($140.6) from the current 850 yuan.

Experts ascribe the wage revision to China's economy warming-up which is seeing a typical V-shape rebound from the global financial crisis.

The National Bureau of Statistics announced January 21 that China's economic growth accelerated to 8.7 percent year-on-year in 2009. The figure "indicates that the country's economy ended accelerating slide and began to recover as a whole," said Ma Jiantang, director of the National Bureau of Statistics on January 21.

"The cities with huge inflows of migrant workers need to offer more decent salaries to attract talents since the living cost is high in these cities," said Hu Chi, deputy director of the research center of China Enterprise Confederation.

Currently China's low-income population are still struggling with poverty and the government should intervene to help the disadvantaged groups share the success of the country's economic reform, said Hu.

Cai Zhizhou, deputy director of Institute of National Accounting and Economic Growth of Peking University, believes the move will also benefit the country and its enterprises.

Under the pressure of higher costs brought by lifting wages, enterprises will be forced to turn to more technical advanced areas, Cai said, "It will accelerate the country and the companies' process of industrial restructuring."

Higher salaries can also boost the domestic demands and helps China transform from an export-oriented nation to domestic demand-promoted, he added.

However, some experts voiced their worries that companies may axes jobs to transfer the increased labor costs.