Minimum wage reaches record high in Zhejiang

Updated: 2011-04-15 13:23

By Yu Ran (China Daily European Weekly)

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Province leads pack among 12 southern and eastern coastal counterparts in standard pay

East China's Zhejiang province has raised its minimum wage the most among 12 provinces and municipalities, mostly in southern and eastern coastal areas, that have raised minimum wages this year in the hope of attracting workers.

The minimum wage in Zhejiang has been raised to 1,310 yuan a month (139 euros) from 1,100 yuan a month. That makes it a more lucrative place for many people to work in than Guangzhou, in Guangdong province, where the minimum wage is 1,300 yuan a month, or Shanghai, where the minimum is 1,280 yuan a month.

Before Zhejiang surpasses them, those cites offered the best opportunities for compensation to Chinese workers on the low end of the wage spectrum.

Over half of the 12 municipalities and provinces in China raised their minimum wage by over 20 percent, and the average minimum set in all eight provinces in East and South China exceeds 1,000 yuan a month, according to Legal Evening News based in Beijing.

"Wages are in a rising trend, but that will not affect China's ability to compete if the average increase rate does not exceed 15 percent," says Yin Xingmin, deputy director of the China Centre for Economic Studies, Fudan University.

Wages should rise faster than the yuan appreciates to ensure economic growth occurs quickly, Yin says.

"My factory raised the average monthly salary by 20 percent earlier this year, from 1,500 yuan to 1,800 yuan, in response to the severe labor shortage before the latest Spring Festival," says Hu Xudong, the owner of Zhejiang Fuyang Jin'aobo Shoe Co.

Hu's factory used to raise the monthly salary it paid by 10 percent each year.

Despite the wage increase, the factory has yet to hire the staff it needs to keep up with the orders that have been placed it. The shortage is expected to cause Hu's factory, which received international orders worth more than 100 million yuan, to lose at least 3 million yuan.

"The competition for recruiting labor in Zhejiang province is much fiercer than in other regions, since most enterprises here are small and medium manufacturers," says Hu, who had to ask local factories for help in filling a few orders this year.

What's more, a shortage of power in Zhejiang is also affecting the operation of small and medium enterprises. Enterprises using fewer than 2,000 kilowatts a day have seen their power shut off every other day.

"The blackout slows production down a lot," Hu says.

Migrant workers have a different opinion about Zhejiang's becoming the top region for its minimum wage.

"I lived in Dongguan (in Guangdong province) for over 10 years before I moved to Wenzhou (in February) for a higher position with better prospects," says Lu Yuepeng, a 37-year-old manager with the development department of a shoe export company in Wenzhou, Zhejiang province.

"But I have to admit that the average actual income and the welfare services in Guangdong are much better than in Zhejiang."

Factories in Guangdong offer free accommodation and dining to workers but the ones in Zhejiang do not.

Among the 12 places that have raised minimum wages, Chongqing reported the highest increase - totaling 27.9 percent. The rise is thought to be the result of more big enterprises moving from coastal cities to inland ones.

"The relatively lower base in Chongqing resulted in the marked increase and the transfer of the labor force from coastal cities to inland ones such as in Sichuan province is also having positive effects," Yin says.


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