Higher wages for workers

An economics professor from the Capital University of Economics and Business found that people’s spending power has shrunk by almost half within eight years. For most people that is not just because the value of the yuan has dropped but because they are underpaid, says an article from dahe. cn. Excerpts:

In developed countries, employees’ wages generally account for about 50 percent of a company’s overall costs. In China, the figure is less than 10 percent.

Also, the amount of labor remuneration in developed countries generally represents more than 55 percent of the country’s national revenues. In China, the proportion is less than 42 percent. What’s worse, people’s incomes as a proportion of national revenue continue to show a downward trend.

The distribution of income in China has favored local governments and enterprises. For example, employees in State-owned monopolistic enterprises have enjoyed larger benefits compared with those working in small- and medium-sized private companies.

Considering the increasing costs of education, medical treatment and buying a house, no wonder people feel that their money is becoming less affordable.

Under current policies, increases in pensions and the threshold for individual income tax are both very limited.

To reverse the deepening wealth gap, the authorities have to continue carrying forward reforms to raise the proportion of earned income at the primary distribution stage. For one thing, local governments should provide policy support for ordinary employees to strive for better wages, and they need to make moves to reduce the burdens on enterprises and the public, and create more channels and space for people to increase their earnings.