Time to change the min­i­mum wage sys­tem in line with cur­rent re­al­i­ties

China Daily (USA) - - COMMENT -

AS OF SATUR­DAY, 11 pro­vin­cial re­gions, about one-third of the to­tal, had raised their min­i­mum wage this year. But the av­er­age growth rate of about 5 per­cent is a record low in re­cent years. Gmw.cn com­ments:

Af­ter the ad­just­ments, the high­est min­i­mum monthly wage is 2,300 yuan ($340) in Shang­hai, and the low­est is 1,000 yuan in South China’s Guangxi Zhuang au­ton­o­mous re­gion.

In fact, the av­er­age growth in the min­i­mum wage na­tion­wide has dropped markedly since the 22 per­cent in 2011.

The lower min­i­mum wage hike is un­der­stand­able, given the over­all eco­nomic sit­u­a­tion.

Take Guang­dong prov­ince for ex­am­ple. Al­though Guang­dong’s GDP was $1.17 tril­lion last year, sim­i­lar to that of Mex­ico, which is ranked the 15th-largest econ­omy in the world, the prov­ince faces a great chal­lenge trans­form­ing and up­grad­ing its la­bor-in­ten­sive in­dus­try.

That the Guang­dong pro­vin­cial govern­ment re­cently an­nounced it will raise the min­i­mum wage once ev­ery three years from this year, in­stead of once ev­ery two years, re­flects the chal­lenges the largest pro­vin­cial econ­omy in China faces ad­just­ing its eco­nomic model.

China im­ple­mented a min­i­mum wage sys­tem on March 1, 2004, in which the low­est wage bench­mark is raised at least once ev­ery two years.

Guang­dong is ob­vi­ously vi­o­lat­ing the min­i­mum wage rules by propos­ing to in­crease the min­i­mum wage in the prov­ince ev­ery three years in­stead of ev­ery two. But this shows it is time to amend the rules, which have re­mained un­changed for nearly 15 years, so they re­flect the global eco­nomic re­al­i­ties.

A sim­i­lar de­cline in the wage growth trend can be ob­served in the United King­dom and the United States.

The min­i­mum wage stan­dards should be set­tled ac­cord­ing to lo­cal con­sumer price index changes, eco­nomic growth mo­men­tum and the fi­nan­cial re­sources of the lo­cal govern­ment.

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