One of Chinas leading manufacturing centres is considering raising its minimum wage by up to 23 percent in an attempt to combat a labour shortage, according to a press report.
Shenzhen in southern China is considering raising the wage from 690 yuan (86 dollars) to 800 or 850 yuan a month that companies inside a special economic zone bordering Hong Kong must pay.
Factories outside the zone would be required to increase their minimum salaries from 580 yuan to 700 or 750 yuan, the Asian edition of the Financial Times said.
Shenzhen already enforces a higher minimum wage than other cities in the Pearl River Delta region which accounts for about a third of Chinas exports.
The plan by the Shenzhen labour bureau is a bid to attract and retain workers to the city, which is among hubs suffering a shortage of low skilled workers.
It also sets the benchmark for increases throughout the south China region and could compel rivals to raise their minimum levels, the report said.
"We have to pay more otherwise wed be short of workers," said Hayes Lou, a factory owner in northern Shenzhen.
The labour bureau briefed employer and worker representatives on the plan on Monday. Yang Yiping, a lawyer and government adviser who was also briefed, said the 800 yuan rate is likely to be approved by the government next month and implemented in July.
"We all know the rate has to go up, and the 800 (yuan) a month proposal was relatively well received," he was quoted by the Financial Times as saying.
Foreign-invested companies tend to pay more than the statutory minimum, also to attract workers, the report said.
Rising wages are among a range of cost pressures - including currency and raw materials costs - that have been chipping away at the competitiveness of factories in south China, the report said.
Wages have also emerged as a potential political issue as Beijing has said it is committed to reducing the burgeoning gap between rich and poor in China.
