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Wage Rule Helps the Disadvantaged

Workers in China, including all the migrant workers flooding into the nation's cities, are now entitled to enjoy a new minimum wage under a revised regulation issued by labour authorities at the beginning of March.

Along with the regulation announced by the Ministry of Labour and Social Security, the government also made public detailed guidelines to be used to calculate wage levels in different regions, taking into account the basic living expenses, local living standards and other indicators.

The ministry has also suggested that a proper minimum wage should be between 40 and 60 per cent of the average income of the people in any given region.

According to the now revised regulation, which was first set in 1993, if enterprises pay workers less than the set regional minimum levels, they will be fined five to 10 times the least sum of wages they should have paid.

But the regulation, which has instituted a round of increases in minimum wage levels nationwide, has drawn criticism as well as praise from the public.

Mounting income gap

Critics see it as another attempt by the government to curb the mounting income gap, but fear that it will also exacerbate the country's unemployment problem.

Nearly all of the cities in the country have already set their minimum wage levels in accordance with the revised regulation. This was accomplished through reviews by and negotiations between local labour bureaux, the trade unions and enterprise associations, employers and employees.

The original regulation has increased minimum wage levels as workers have faced increasing expenses over the years since its adoption, says Wang Zhihong, deputy director of the ministry's Department of Wage Management.

"We must increase the minimum wage level because workers must use some of their income to buy insurance," says Wang.

The government is now setting up a social security system and workers and enterprises will share the cost of this social insurance.

Safeguarding the interests of part-time workers who have no fixed hours of employment or workplaces is another aim of the revised regulation.

"Traditional" jobs have fixed hours and locations, but with "non-traditional" jobs, the hours, days or even seasons of work can vary from employer to employer.

China's top leadership has recently been pushing for a more flexible employment system to accommodate the country's huge body of unemployed workers.

Experts say the country's labour authority previously focused only on protecting the rights and interests of traditional workers. As a result, those working in non-traditional jobs have been getting unreasonably low pay or have had their rights infringed upon.

"The country needs laws and regulations to set a minimum wage in such cases and to protect those workers against exploitation," says Wang.

Official statistics indicate that 145 million Chinese worked without fixed hours, wages or other conditions last year. Only 14 per cent of these people earned more than 500 yuan (US$60) per month, while only 10 per cent had signed employment contracts with their employers.

The ministry explained that the minimum wage does not include overtime pay or any special wages for working under extreme conditions, such as intense heat or dangerous environments. It also does not include benefits such as insurance, free meals and housing subsidies and so on.

Trade unions also stand firmly behind the revised minimum-wage regulation.

Ding Dajian, a senior official with the All-China Federation of Trade Unions says her organization has been working out a mechanism to ensure prompt payment of wages for unskilled workers, especially migrant rural workers.

"I'm glad to know that migrant workers are protected by the regulation," says Ding. "We hope specific articles will be added to the regulation to guarantee prompt payment of labourer's wages, including those earning minimum wages."

Monthly or weekly pay

What unionists want to see added to the regulation is the following:

First, like every other worker or employee, migrant workers should be paid monthly or weekly.

Second, payment of wages can be delayed only on the condition that trade unions agree, and the delay period should be no more than two weeks.

Despite the efforts of the government and trade unions, some job hunters say they don't care about the regulation.

Random interviews conducted by China Central Television (CCTV) with 10 migrant workers in Beijing indicated that the migrants knew nothing about the regulation that could protect them from violations of their interests. All of them earn about 500-800 yuan (US$60-96) per month.

Li Chao, 18, says she has worked as a housekeeper in Beijing for two years since graduating from junior high school in her hometown in Henan Province.

Over the period she has had six different employers and her pay has fluctuated from 400-600 yuan (US$48-72) per month.

"I didn't know there was a regulation guaranteeing a minimum wage, and even though I now know, I don't know how to deal with employers who violate the regulation," she says, adding that all she wants is a job that allows her to enjoy a basic standard of living.

The Beijing Labour and Social Security Bureau says the minimum wage rate in Beijing was raised 30 yuan (US$3.6) to 495 yuan (US$59.8) per month at the beginning of this year. The new rate applies to all the employees of companies, institutions, government departments and other organizations.

Before January 1st, the minimum level had been 465 yuan (US$56) a month, and the city adopted a minimum wage in 1994, when the government required employers to pay their employees at least 210 yuan (US$25.3) per month.

Nearly all the cities and counties of the country have set minimum wage levels in a bid to protect the rights of workers.

But some researchers say the government should be careful about the negative side of the issue.

"The minimum wage should be eliminated. Government has no obligation nor the power to determine a person's value in the job market," a researcher with the Chinese Academy of Social Sciences told China Daily on condition of anonymity.

He says that if government forces a business to pay more than a person's market value, somebody else is going to be paid less than they are worth to compensate for that person's gain.

"Workers' wages should be determined by competitive market forces, not government-imposed mandates."

He says the regulation and consequent wage hikes could work to the detriment of low-skilled and young wage earners. Legislation to raise the minimum wage is no answer to poverty. Instead, it will increase poverty.

"Economists believe that raising the minimum wage could instantly eliminate tens of thousands of jobs.

But He Fan, another renowned researcher with the academy, an influential thinktank for the government, says in a market economy, the role of the government is to make the society more fair and equal.

"As China becomes increasingly market-orientated, the income gap has widened and government should guarantee a basic living standard for those at the bottom of the employment ladder," says He.

(China Daily April 2, 2004)

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