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Big wage rises

By Cao Li (China Daily)
Updated: 2008-05-06 09:49

Workers in Shanghai could be in for a big pay rise this year, if employers adopt the proposals of a government report.

An annual wage guideline by the Shanghai labor and social security bureau has recommended maximum increases of 16 percent, an average of 11 percent and a minimum of 5 percent. The figures are about 2 percentage points higher than last year.

Firms that paid about the same as the city's average - 34,707 yuan ($4,960) last year - are advised to give a raise of 11 percent. Those that paid about half the average should give the maximum, and companies that are not making money, about 5 percent.

It also suggested that companies decide on the raises after discussions with workers' unions or representatives of employees.

The guideline takes into consideration rising inflation and growing labor costs.

But experts doubt the guideline will really help low-paid workers, as most of the raises in the past have gone to managers and executives.

A survey of 250 companies conducted last year found more than half of the workers had not been given a rise in the previous three years. Some workers said they had not had an increase for six years.

Since the late 1990s, every city and provincial government has been told to suggest pay rise levels.

"But this is not mandatory," Liao Mingtao, a labor lawyer with M&A Law Firm, said.

The recommendations exert a positive influence on employers but they are not carried out immediately, he said.

"Because no fines or other punishments are applied if employers ignore the recommendations," he said.

But there is hope, Liao said.

"With the implementation of the Labor Contract Law and a new local law that encourages talks between employers and employees on wages, workers are more confident," he said.