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MIGRANT worker Su ruifang has lived in Beijing for more than 10 years. She started out as a cleaner, but has since gained skills and now works as a soughtafter confinement nurse enjoying a monthly income increase from 600 yuan($95) to 5,000 yuan ($793).
Many Chinese couples plan to have a baby in 2012, the Year of Dragon, as they believe babies born in this year will lead a propitious life. As a result, the demand for confinement nurses like Su is on the rise.
“I am in for an income boost because many expectant mothers even made a reservation [for my services] six months in advance,” she said, adding, “White-collar workers only make an average of 3,000 yuan ($476) per month in my hometown city of Dalian.”
Raising standards
Su is among the working class who feel their wages have increased substantially in recent years because of the government’s efforts.
According to the data released by the Ministry of Human resources and Social Security, by the end of September last year, a total of 21 local governments had adjusted their minimum wage standards, with an average increase of 21.7 percent year-on-year.
The southern manufacturing city of Shenzhen had the highest minimum wage at 1,500 yuan ($238) per month and Beijing had the highest minimum hourly wage at 13 yuan ($2).
The per-capita income of urban residents rose 8.4 percent, after deducting inflation, to 21,810 yuan ($3,461) in 2011 from a year earlier, said the national Bureau of Statistics (nBS). Urban residents’wage income grew 12.4 percent. Meanwhile, the per-capita income of rural residents grew by 11.4 percent year-onyear to 6,977 yuan ($1,107), faster than the previous year, and their wage income grew 21.9 percent.
The increase in income is followed by a further rise in consumption. China’s retail sales rose 14.7 percent year-on-year to 3.37 trillion yuan ($533.8 billion) in the first two months of this year, nBS announced.
Xu Shanda, former Deputy Administrator of the State Administration of Taxation, believes increased income is key to the growth of consumption. Domestic consumption will become a more important source of economic growth in the next five-year period and beyond than it was in the past.
Policy continuity
Wage increases are expected to continue in the long term, as the 12th Five-Year Plan for national Economic and Social Development (2011-15) targets an annual increase in the minimum wage level of no less than 13 percent.
According to figures released by the national employment promotion plan in February, the minimum wage should be lifted to at least 40 percent of the average local salaries by 2015.
Liu Junsheng, a researcher with the labor and wage institute affiliated with the Ministry of Human resources and Social Security, said a continuous rise of the minimum wage will help increase the money in workers’ pockets and therefore benefits their livelihood.
Meanwhile, the employment promotion guideline will facilitate labor absorption in the tertiary industry, especially for small and micro-sized firms in the industry, said Liu Yunfeng, Senior Investment Advisor with Datong Securities.
The growth in the cost of labor has increased competitive pressure for small and medium-sized enterprises.
“Earlier this year my factory raised the monthly salary by about 20 percent before Chinese new Year, from 2,500 yuan($396) to 3,000 yuan ($476), in response to the severe labor shortage,” said Wang Lianzhi, the owner of an air-conditioner factory in Beijing.
Wang said inflation feels are higher than the official figure as the labor costs are much higher than before.
The consumer price index (CPI), the main gauge for inflation, in January gained 4.5 percent year-on-year, compared with the predicted 4 percent.
Inflation fears
Some experts worried that rapid growth in wages would exacerbate inflation, which could lead to “a spiraling upward trend” in both wages and prices.
But Yao Jingyuan, former chief economist with nBS, disagreed. “Inflation worldwide is not primarily driven by the growth in minimum wage standards,” he said. “It’s a good thing that wages are being raised. It sets a bottom line for workers to guarantee their income.”
Liu Yingqiu, Dean of the Graduate School of the Chinese Academy of Social Sciences, said it is reasonable to worry about the upward trend, because increased incomes will help spur consumption, and the rising purchasing power is then likely to push up the price of consumer goods. Yet a “growth in wages is not necessarily linked to inflation,” he added.
Many Chinese couples plan to have a baby in 2012, the Year of Dragon, as they believe babies born in this year will lead a propitious life. As a result, the demand for confinement nurses like Su is on the rise.
“I am in for an income boost because many expectant mothers even made a reservation [for my services] six months in advance,” she said, adding, “White-collar workers only make an average of 3,000 yuan ($476) per month in my hometown city of Dalian.”
Raising standards
Su is among the working class who feel their wages have increased substantially in recent years because of the government’s efforts.
According to the data released by the Ministry of Human resources and Social Security, by the end of September last year, a total of 21 local governments had adjusted their minimum wage standards, with an average increase of 21.7 percent year-on-year.
The southern manufacturing city of Shenzhen had the highest minimum wage at 1,500 yuan ($238) per month and Beijing had the highest minimum hourly wage at 13 yuan ($2).
The per-capita income of urban residents rose 8.4 percent, after deducting inflation, to 21,810 yuan ($3,461) in 2011 from a year earlier, said the national Bureau of Statistics (nBS). Urban residents’wage income grew 12.4 percent. Meanwhile, the per-capita income of rural residents grew by 11.4 percent year-onyear to 6,977 yuan ($1,107), faster than the previous year, and their wage income grew 21.9 percent.
The increase in income is followed by a further rise in consumption. China’s retail sales rose 14.7 percent year-on-year to 3.37 trillion yuan ($533.8 billion) in the first two months of this year, nBS announced.
Xu Shanda, former Deputy Administrator of the State Administration of Taxation, believes increased income is key to the growth of consumption. Domestic consumption will become a more important source of economic growth in the next five-year period and beyond than it was in the past.
Policy continuity
Wage increases are expected to continue in the long term, as the 12th Five-Year Plan for national Economic and Social Development (2011-15) targets an annual increase in the minimum wage level of no less than 13 percent.
According to figures released by the national employment promotion plan in February, the minimum wage should be lifted to at least 40 percent of the average local salaries by 2015.
Liu Junsheng, a researcher with the labor and wage institute affiliated with the Ministry of Human resources and Social Security, said a continuous rise of the minimum wage will help increase the money in workers’ pockets and therefore benefits their livelihood.
Meanwhile, the employment promotion guideline will facilitate labor absorption in the tertiary industry, especially for small and micro-sized firms in the industry, said Liu Yunfeng, Senior Investment Advisor with Datong Securities.
The growth in the cost of labor has increased competitive pressure for small and medium-sized enterprises.
“Earlier this year my factory raised the monthly salary by about 20 percent before Chinese new Year, from 2,500 yuan($396) to 3,000 yuan ($476), in response to the severe labor shortage,” said Wang Lianzhi, the owner of an air-conditioner factory in Beijing.
Wang said inflation feels are higher than the official figure as the labor costs are much higher than before.
The consumer price index (CPI), the main gauge for inflation, in January gained 4.5 percent year-on-year, compared with the predicted 4 percent.
Inflation fears
Some experts worried that rapid growth in wages would exacerbate inflation, which could lead to “a spiraling upward trend” in both wages and prices.
But Yao Jingyuan, former chief economist with nBS, disagreed. “Inflation worldwide is not primarily driven by the growth in minimum wage standards,” he said. “It’s a good thing that wages are being raised. It sets a bottom line for workers to guarantee their income.”
Liu Yingqiu, Dean of the Graduate School of the Chinese Academy of Social Sciences, said it is reasonable to worry about the upward trend, because increased incomes will help spur consumption, and the rising purchasing power is then likely to push up the price of consumer goods. Yet a “growth in wages is not necessarily linked to inflation,” he added.