Jiangsu Province to Raise Minimum Wage Standards

Jiangsu Province will lift its minimum wage standards by over 15 percent beginning next month in an effort to offer more support to workers with low income and to ensure an abundant supply of migrant workers for production in the new year.

The Jiangsu Department of Human Resources and Social Security (JSHRSS) issued on January 4 the “Circular in Relation to the Adjustment of the Minimum Wage Standards in Jiangsu Province” (surenshefa [2011] No.5). It announces that from February 1, employers in Jiangsu Province shall follow the newest minimum wage standards as follows:

• The minimum monthly wage of first tier cities will increase to RMB1,140 (from the original RMB960), second tier cities to RMB 930 (from the original RMB790), and third tier cities to RMB800 (from the original RMB 670)
• The minimum hourly wage of first tier cities will go up to RMB9.2 (from the original RMB7.8), second tier cities to RMB7.5 (from the original RMB6.4), and third tier cities to RMB6.5 (from the original RMB5.4)
• The minimum wage standards shall not include compensation for working overtime, subsidies for working under dangerous conditions, or other legal benefits for workers; the wage workers obtain excluding the aforementioned items and the proportionately-paid housing fund shall not go below the minimum standards

An official of the JSHRSS said the wage raise before the arrival of the Chinese New Year will provide a positive signal to Jiangsu’s labor force market and guarantee a sufficient quantity of human resources for production in the wake the New Year holiday.

Cai Zhizhou, deputy director of the Institute of National Accounting and Economic Growth at Peking University, believes the salary hikes in China will accelerate the country’s process of industrial restructuring, since higher labor costs will force enterprises to move to more technologically advanced areas and transform China’s export-oriented economic growth model to domestic demand-promoted.

However, there are also worries from some experts who feel that the wage lift may lead to redundancy by companies to offset the increasing labor force costs.

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