Government and Policy

China considers cap on salaries at state monopolies

(Xinhua)
Updated: 2010-06-30 01:43

BEIJING - Chinese authorities are considering putting a ceiling on the total amount of salaries distributed at profitable state-owned monopolies amid government efforts to narrow the widening wage gaps between the rich and poor.

The Ministry of Human Resources and Social Security (MHRSS) said in a report that it would proceed to map out specific measures to "strictly control" the total payments distributed at state-owned monopoly businesses. The report was obtained by Xinhua Tuesday.

Related readings:  Tax system widening the income gap  Research begins for income distribution reform  Wen vows to deepen China's income reform  Graduates prefer State-owned to foreign companies

The report, which was written after a working group from the Standing Committee of the National People's Congress (NPC), China's top legislature, put forward written proposals on the enforcement of the country's Trade Union Law, did not spell out the upper limit of the payment aggregate.

In China, the monthly salary for an average employee at state-owned monopolies, such as telecommunications and natural resources, could be as high as three times compared to those working in the private sector, most of whom earn about 3,000 yuan ($440) per month.

This widening gap has resulted in some public complaints and driven millions of college graduates to seek jobs at state-owned monopolies, where employees are assured of better healthcare insurance and a more stable income.

To establish a "normal wage growth mechanism", the ministry said in its report it would continue to address wage gap problems through a procedure to "put a ceiling on high-income, expanding the medium-income class and ensuring minimum wages."

The ministry would also continue to push for the establishment of a mechanism that grants workers more decision-making power in formulating salary policies and enables their wages to fluctuate in line with the ups and downs of businesses, according to the report.

It said the income of executives, especially those in the senior ranks, in centrally administered state-owned enterprises should be regulated and authorities should ensure minimum wage standards be altered in a reasonable and timely manner.

The Standing Committee of NPC has assigned a working group to review the enforcement of the country's Trade Union Law from July to August last year.

Based on investigations and research, the working group sent forward written proposals on the implementation of the Trade Union Law.

The MHRSS, in collaboration with the ministries of commerce and health, the All China Federation of Trade Unions, as well as the Legislative Affairs Office of the State Council, or China's cabinet, mapped out the report based on these proposals.

The report was then submitted to the State Council and forwarded to the top legislature at the 15th session of the Standing Committee of the 11th NPC, a four-day meeting that ended Friday.

Copies of the report were distributed to members of the NPC Standing Committee during the meeting.