China's wage proportion decreases for 22 years

By Jin Zhu (China Daily)
Updated: 2010-05-13 06:58
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Beijing - The proportion of China's GDP that goes toward wages has been shrinking for 22 consecutive years, a senior trade union official said on Wednesday.

Zhang Jianguo, chief of the collective contracts department with the All-China Federation of Trade Unions (ACFTU), also warned that low pay, long working hours and poor working conditions for millions of workers are triggering conflicts and mass incidents, which pose a grave challenge to social stability.

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The proportion of the country's GDP that makes up wages and salaries peaked at 56.5 percent in 1983 and dropped to 36.7 percent in 2005, Zhang said.

"The proportion has not changed too much since then. In contrast, the proportion of returns on capital in GDP had risen by 20 percent during the period from 1978 to 2005," Zhang said in an interview posted on the ACFTU's website.

The annual average wages of workers in urban areas had increased from 12,422 yuan ($1,819) in 2002 to 29,229 yuan in 2008, statistics from the National Bureau of Statistics showed.

However, the gap between the rich and poor has been widening in the country and is also growing between urban and rural areas, different provinces and cities, as well as in different industries, he said.

About one-quarter of respondents in the latest ACFTU survey said their incomes have not increased in the past five years, while 75.2 percent of them said that current income distribution is not fair. Similarly, 61 percent of those polled said the wages of laborers were low.

China developed a capital-labor negotiation system for determining wages in 1994 and it was thought to be the most effective way of increasing workers' salaries.

However, "since many cadres of trade unions fail to adequately protect workers' rights, it is very difficult to promote more collective contracts to benefit more workers", Zhang said.

By 2009, there were more than 1.2 million collective contracts nationwide, covering more than 2.1 million enterprises and 161 million employees.

"Low pay, long working hours and poor working conditions caused conflicts and even mass incidents between labor and management to occur more frequently in recent years, which has already become a major factor affecting current social stability," Zhang said.

On July 24 last year, 3,000 steel workers protested when they were threatened with job cuts following the takeover of their company, the Tonghua Iron and Steel Group, by a private firm in Jilin province. The workers later beat company executive Chen Guojun to death.

A number of strikes staged by taxi drivers citing harsh working conditions and low pay have also been reported in the last two years in many cities and provinces, including Chongqing municipality as well as Hainan, Yunnan and Gansu provinces.

Similarly, in the first quarter of this year, seven provinces and municipalities including Jiangsu, Zhejiang and Shanghai increased their minimum-wage standards by 10 percent to 17 percent, while another 20 provinces plan to adjust their minimum-wage level this year, the Ministry of Human Resources and Social Security said.

Xinhua contributed to this story

China Daily