Minimum Wages

China Vows to Increase Wages and Improve Employment

Op/Ed Commentary: Vivian Ni

Feb. 10 – In its latest 12th Five-Year Plan on Employment Improvement (“Plan”), China says it will continue working on increasing wage levels and controlling unemployment rates. Under these new targets, enterprises operating in China may face the challenge of increasing operational costs.

Minimum wage and social welfare
According to the new Plan, the average annual growth rate of China’s minimum wage levels will be over 13 percent between 2011 and 2015. The minimum wage standards in most areas will not be lower than 40 percent of the local average wage level. Continue reading →

Posted in Business, Legal and Regulatory, Manufacturing, Minimum Wages, South China | Tagged China HR, China Labor, China Overheads, Migrant Workers, Minimum Wages, Operational Costs | Leave a comment

Shenzhen, Beijing Raise Minimum Wage Standards

Jan. 12 – On December 31, 2011, both Shenzhen and Beijing announced their new minimum wage standards for 2012. Following the adjustment, Shenzhen’s minimum wage standard will reach RMB1,500, the highest in the whole country.

Shenzhen
According to the “Circular on Minimum Wage Standards Adjustment in Shenzhen (shenrenshegui [2011] No.19),” starting on February 1, 2012, Shenzhen’s minimum wage standards will be raised as follows:

Continue reading →

Posted in Business, Legal and Regulatory, Minimum Wages, Regulatory Update, South China | Tagged Beijing Minimum Wage, Beijing Piece-rates, China Minimum Wage, Full-time Minimum Wage, Part-time Minimum Wage, Shenzhen Minimum Wage | 2 Comments

Foreign Investors Should Be Aware of Labor Strike Tactics in China

By Vivian Ni

Nov. 29 – Increasing labor costs have become a major concern for foreign companies mulling whether or not to invest in China, but this may not be the only labor-related issue they should be watching out for. As the recent global economic downturn brings about falling factory orders, an abundance of young, well-educated and computer-savvy Chinese workers are leading one of the country’s strongest waves of labor unrest and labor disputes, which could cause real damage to companies’ regular day-to-day operations.

Intensified labor unrest
Over a one-week period in mid-November, more than 10,000 workers in Shenzhen and Dongguan – the two leading export hubs in South China’s Guangdong Province – went on strike. Continue reading →

Posted in Business, Manufacturing, Minimum Wages, South China | Tagged Adidas, China CPI, China Dongguan, China Guangdong, China Inflation, China Labor Activists, China Labor Bulletin, China Labor Relations, China Labor Unrest, China Labor Watch, China Minimum Wages, China Shenzhen, China Strikes, Global Economic Downturn, Gucci, Honda, Labor Costs, Nike, Shenzhen Minimum Wage, Toyota | 3 Comments

The United States: A New China Alternative?

By Vivian Ni

Nov. 3 – China is gradually shifting away from its position as the world’s default production base for manufacturers. In this country, factor costs are surging and government incentives for foreign investors are diminishing, forcing more and more companies to seek new and attractive destinations where they can relocate their factories. While emerging Asian countries boasting low overhead costs – such as India, Vietnam, Thailand and Indonesia – are undoubtedly attracting mounting attention, the United States is also growing back into an increasingly reasonable option for manufacturing, according to an intensive study conducted by the U.S.-based advisory firm The Boston Consulting Group (BCG).

The BCG report, which suggests manufacturers take “a hard, fresh look” at the United States, pointed out that China’s manufacturing cost advantage over the United States is shrinking fast due to Chinese labor becoming more expensive and local currency gaining value while productivity is not catching up as rapidly. When making their investment decisions, investors should take total costs – rather than only labor costs – into consideration and choose manufacturing locations based on product-by-product analyses. Continue reading →

Posted in Business, FDI and Foreign Trade, Manufacturing, Minimum Wages | Tagged China Alternative, China Minimum Wages, China Social Welfare, China Tax, China Transportation, Factor Costs, Global Supply Chains, Industrial Land Prices, Labor Costs, Manufacturing, Production Base Relocation, Productivity, The United States, Traspacific Transportaion | 4 Comments

Beijing Looks to Hike Average Wages

Jul. 26 – Beijing’s municipal government is set to release a new plan aimed at increasing average wages for the capital city’s citizens. Zhang Gong, director of the Beijing Municipal Commission of Development and Reform, said that the average wages of the city’s urban population increased 4.4 percent (after deducting price factors) in the first half of 2011, while the average wages of the city’s rural population increased 6.5 percent. The local government’s goal was 7 percent. The report said the municipal government will raise wages at the same time to curb inflation. It proposed a policy with details and will announce these shortly.

The proposal differs from previous mandatory wage increase proposals, which have been based on the minimum wage. China has already long indicated its desire to raise the welfare of the poor within its social strata, and is embarking on a national program that will see the minimum wage double from 2010 to 2014. This also raises the amount of mandatory welfare payments due on behalf of employers, in part a move to provide better security and financing for China’s increasingly grey population and their pension requirements. Continue reading →

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Hong Kong Statutory Minimum Wage to Come into Force

Apr. 1 – The Minimum Wage Ordinance (MWO) was passed by Hong Kong’s Legislative Counsel and will come into force on May 1, 2011. The initial statutory minimum wage (SMW) rate is HK$28 per hour. The same protection applies also to employees with disabilities, who may choose to undergo a productivity assessment to determine whether they should be remunerated at not lower than the SMW level or at a rate commensurate with their productivity.

SMW applies to all employees, whether they are monthly-rated, daily-rated, permanent, casual, full-time, part-time or other employees, with certain exceptions such as student interns, live-in domestic workers and a family member who lives in the same dwelling as the employer. Wages payable to an employee, when averaged over the total number of hours worked in the wage period, should be no less than the SMW rate. Continue reading →

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Zhejiang New Minimum Wage Standards to be Set in line with GDP Per Capita

Mar. 4 – The Zhejiang Provincial Government has announced that minimum wages in the province are to increase in line with the GDP per capita in each city during the 12th Five-Year Plan. Local authorities should take into account the degree of financial development, cost of living, and the average salary rise in each area in order to come up with an appropriate standard for the minimum wage, said a news report released by provincial authorities this week. Continue reading →

Posted in East China, Legal and Regulatory, Minimum Wages | Leave a comment

Migrant Workers in China Demand More from Employers

Feb. 11 – Increasing militancy over labor conditions and terms by migrant workers in China is having a serious impact on South China-based businesses, as many migrant workers are refusing to return from the Chinese New Year vacation unless their demands are met. With workers becoming increasingly aware of their rights under the Labor Law, many are resorting to strong-arm tactics to “persuade” factory owners to give them more money. The situation is often exacerbated by grass roots labor union officials, who also stand to benefit via larger payments into the labor funds at their disposal if companies pay higher wages.

In one case related to the South China Morning Post, 30 migrant workers climbed onto the roof of one Shenzhen factory last month and threatened to collectively jump off if they were not allowed to go home five days early for the Chinese New Year vacation. In another case, workers demanded an additional 8 percent wage increase (on top of the 34 percent increase in wage levels in 2010) to return from Chinese New Year vacation, giving them a total salary increase of 42 per cent year-on-year. Continue reading →

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