Early last month, China’s central government revealed a plan to increase the country’s minimum wage. As noted in Hessler’s Country Driving, the minimum wage differs across the country according to variances in the cost of living (see minimum wage map). Not only does the minimum wage differ from province to province, but it can also vary within a province along county and city lines. For example, the Shenzhen district has a 1,500 yuan/month minimum wage while Chongqing only requires 870 yuan/month.
In an attempt to rectify wealth disparities, the government is mandating minimum wage to be 40% of the average local worker’s salary. Beijing is also requiring state companies to give up a portion of profits in order to help fund social programs like health and education. State Chinese governments are required to raise minimum wage levels at least every other year, which has resulted in a 12.5% minimum wage increase per year between 2006 and 2010.
While this plan sounds good on paper, Hessler has shown us how lax government officials can be when it comes to labor laws (i.e. – overlooking the bra-ring factory employing minors). The informal relationships between local cadres and business owners encouraged by guanxi seem to make adherence to government policies the exception rather than the rule. With these ideas in mind, I think the results these policies set to achieve will not be met.
What do you think? Are these policies feasible? Necessary?