Editorials

Hike wages

(China Daily)
Updated: 2010-05-28 07:58
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Editor's note: China should narrow the wealth gap and foster affluent consumers.

The declining share of wages as a proportion of China's gross domestic product has necessitated the need for fresh regulation, especially in a country that is trying hard to embrace consumer-led growth.

The Ministry of Human Resources and Social Security has, however, achieved little progress so far in drafting an amendment to the current wage regulation due to strong opposition from employers. Reportedly, the amendment, designed to help tilt income distribution in favor of workers, is unlikely to come into effect by year-end as had been expected.

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Any delay in government efforts to arrest the downward spiral of wages as a proportion of the national GDP will certainly be disappointing.

Sustained inaction may actually fuel already rising tensions between laborers and employers, as evidenced by the recent case of workers at a Honda plant in Guangzhou who struck work citing pay-related issues. The shocking string of suicides at Foxconn Technology Group's plant in Shenzhen has also highlighted, among other things, the bitter conditions that industrial workers toil under in this country.

Under such circumstances, the government is obligated to giving workers the much-needed succor to defend their rights and interests.

The proposed wage regulation is expected to include much-awaited rules on equal pay and collective negotiations for wages. The concern by employers in face of competition, especially during the economic recovery, may be understandable, but should surely not prevent the authorities from setting in motion legislation aimed at bettering workers' wages.

On the one hand, the widening wealth gap demands immediate effort to significantly increase the work reward for the many poor compared with the rich returns on capital enjoyed by entrepreneurs. On the other, the shift in growth model means it has to foster a large group of affluent consumers as quickly as possible. Sustainable growth in consumption will simply be meaningless if employee wages are choked down.

(China Daily 05/28/2010 page8)