China Minimum Wage – Average Increase of 12 Percent in the First Half of 2015

SHENZHEN, China - June 11, 2015 - PRLog -- The National Twelfth Five-Year Guideline and policy statement “Several Opinions on Deepening Income Distribution System Reform” from the State Council clearly lay out that the minimum wage should be increasing by up to 13% per year over the next five-year period.

Minimum Wage to Secure Chinese Living Standard

The stated minimum wage secures the living standard of low-income employees and their families. According to National Federation of Trade Unions, around 20% of all employees will be affected directly or indirectly by increasing the official minimum wage. Moreover, the National Federation of Trade Unions claimed the increase in the rate of minimum wage growth will slow down progressively, given that the rates of increase have been 22%, 20%, 17%, and 14% from 2011 to 2014. Since 1 January 2015, Shanxi, Guangxi, Hunan, Hainan and Tibet increased their minimum wage standards. It can notice that Tibet had not increased the minimum wage for the monthly paid employees since September 2012. Meanwhile, the minimum wage has become more than RMB1000 in 3rd Class and 4th Class areas in Guangxi and the minimum wage is now over RMB2000 per month in Shenzhen and Shanghai.

As at 1 May 2015, 12 provinces and cities have updated their minimum wages. Further information is listed in a table (sorted by 1st Class area from highest to lowest) designed by SGS SA within the latest SafeGuardS bulletin (http://newsletter.sgs.com/eNewsletterPro/uploadedimages/0...).

For detailed information on the different regions, cities and towns, please refer to SGS China’s Minimum Wage Map (http://www.sgsgroup.com.cn/zh-CN/app/china-wages-map.aspx).

Remarks on the China Minimum Wage

- * Tibet’s monthly minimum wage standard has been adjusted from the 2nd Class area to 1st Class area in 2015.
- ** Tibet’s non-fulltime hourly minimum wage standard has been adjusted from the 2nd Class area to 1st Class area in 2015.
- Class area means area classification, it specifically refers to regional city grading in China.

Minimum Wage in Chinese Provinces

From the above-mentioned table, it can be seen that minimum wage is now above RMB1000 in the mentioned 12 provinces and cities. At present, Shenzhen has the highest monthly minimum wage with RMB 2030 per month, and Beijing leads in the hourly rates with RMB18.7 for non-fulltime employees. In the meantime, the minimum wage of Guangdong province showed the highest rate of growth at 22%. In particular, Zhuhai city has increased the minimum wage to RMB1650 which is higher than the wage of 2nd Class area.  It should be noted that the minimum wage of Shanghai and Beijing is “net income”, which means pay after deduction of social insurance and housing fund, so the employing unit will face additional cost in accordance with the latest regulations.

Every province is expected to adjust the minimum wage every two years taking into account numerous considerations, including inflation and employment levels. According to the ACFTU’s notification about the minimum wage adjustment, Heilongjiang and Tibet have not adjusted their minimum wage levels since 2012 which is not in accordance with requirement that minimum wages in China are updated at least every two years.

Minimum Wage Standard and Chinese Living Standard

In fact, the fundamental goal of adjusting the minimum wage standard is to safeguard the interests of workers. Good living conditions and guaranteed wages could help cities raise their competitiveness and improve the employment competitiveness. Although there has been a slowing-growing economy pressure, the new minimum wage standard did not make a significant impact on efficient medium and big enterprises. However, it has influenced OEM factories and other lower-tier suppliers to upgrade their business models and increase productivity to survive.

Reference:

Human Resources and Social Security department (bureau) websites of provinces and cities listed in the table.

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