Op-Ed Contributors

Low-wage era not over yet

By Qin Xiaoying (China Daily)
Updated: 2010-07-08 08:03

As a country with a 1.3 billion population, China is surplus in labor supply.

The country's accelerated urbanization drive has led to the flow of hundreds of millions of laborers from less developed rural areas into the cities.

As a result of this migration, China's labor supply has long exceeded market demand and the wages of ordinary workers has been comparatively lower for a long time.

At the same time, the country's labor unions have failed to protect the legitimate interests and rights of ordinary workers.

The nation has yet to set up an effective mechanism aimed at facilitating negotiations between employees and employers for better wages and other welfare measures.

In China's labor market, where supply exceeds demand, ordinary employees are usually at a disadvantage when it comes to dealing with their employers.

Quite often, they are likely to be replaced by other workers waiting in the wings if they decline to accept the existing wage structure.

The situation is unlikely to change under the country's current labor supply-demand landscape.

The lack of a well-developed wage mechanism is also partly to blame for the country's prevalent low-pay conditions.

China's current wage earners may chiefly be categorized into three groups.

The first group comprises enterprise managers, most of whom usually enjoy a comfortable yearly salary.

The second group includes public servants and other administrative personnel, whose income is usually composed of basic wages and bonus, with the latter sometimes forming the lion's share.