Wages not enough to define income groups

Updated: 2014-01-23 16:27


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The statistics department should not only consider people's wages when defining the high income group. There are other, if not illegal, income sources for the rich that must be heeded by the government, says an article of the 21st Century Business Herald. Excerpts below:

The National Bureau of Statistics disclosed recently that the annual income of urban residents in 2013 was 29,547 yuan ($4,882) and classified urban residents' incomes into five levels, with the top group’s personal disposable annual income at 56,389 yuan.

This classification was greeted with overwhelming doubt, because people do not think an annual income of 56,389 yuan is high today in many Chinese cities.

Given the high housing prices in Chinese cities, an annual income of 56,389 yuan is indeed not high, as this would not buy wage earners two square meters of an apartment in big cities.

The high-income group of China mainly consists of entrepreneurs, speculators, civil servants and celebrities, whose income, many argue, largely remains opaque to the tax authority.

Besides, the overall income of a person should include their wage, property income and welfare bonuses. The statistics department cannot ensure their survey has covered all the income sources of the truly rich people in China. In addition, many rich Chinese have already transferred their wealth abroad through various means.

The fast rise of labor costs means wage payments for some blue-collar workers, many of whom are migrant workers, are higher than for white-collar workers. But the laborers' welfare treatment is usually much lower than that of white-collar workers and their family financial burden is invariably heavier than for urban residents.

Thus, it is inappropriate to only consider how much in wages people make each year, while being blind to the fact that the national wealth distribution structure is far from fair.

High housing prices in the cities and farmers' lack of property income for their land further widens the income gap between the urban area and the countryside, which must be addressed in future reform.