The minimum wage would be raised 15 percent to nearly 1,300 RMB (197 USD) in Shenzhen in July, the city labor resources and social security bureau said yesterday (Jan 25).
The bureau releases a new minimum wage standard each July. This year's adjustment had taken into account rising commodity prices, bureau head Wang Min said.
It was also expected that the Shenzhen minimum wage, now 1,100 RMB, would double in five years.
If the minimum wage was immediately raised, it could become a burden on companies, Wang said.
"For a company with labor costs accounting for one-third of its overall costs, a 10-percent rise in the minimum wage would indicate a 3-percent increase in its labor costs," he said.
"The company's social insurance program would further raise labor costs by 5 percent. The profit margin for most companies involved in manufacturing seldom exceeds 10 percent."
Shenzhen has raised the minimum wage 18 times since 1992 and, for 17 years, the wages were the highest in the country. Shanghai surpassed the city last year as did Beijing this month.
Some provincial committee of the CPPCC advisers suggested Shenzhen's minimum wage be set at 1,600 RMB because the average monthly income was 4,224 RMB last year.
(By Jane Lai)
