Wednesday, December 29, 2010

Beijing city to raise minimum wage 21%

28 Dec 2010 12:47pm⁠

Beijing city to raise minimum wage 21%

By Jamil Anderlini in Beijing and Rahul Jacob in Hong Kong

Beijing city is to raise its minimum wage 21 per cent next year, the second such rise in barely six months, amid rising inflationary pressure and growing concern over China's widening wealth gap.

The increase, which will come into effect on New Year's day, raises the statutory minimum monthly wage in the Chinese capital to Rmb1,160 ($175) and the hourly rate to Rmb6.7. It follows a 20 per cent rise in June.

Every province and municipality in China has announced a rise in its minimum wage this year, with increases ranging from 12 per cent to Beijing's rise.

The official measure of annual consumer price inflation in China hit 5.1 per cent in November, up from 4.4 per cent in October, with food prices rising 11.7 per cent in November from a year earlier.

The government is worried about the disproportionate burden of rising food costs on low-income households, which spend a larger share of their income on basic necessities. It also fears that persistent price rises could stoke social unrest, as they often have in the past.

"While China's living standards have dramatically risen over the past 30 years, the gap between rich and poor has sharply widened," Yu Yongding, an influential former adviser to China's central bank, wrote in a newspaper article last week. "With the contrast between the opulent lifestyles of the rich and the slow improvement of basic living conditions for the poor fomenting social tension, a serious backlash is brewing."

Nationwide increases in minimum wages are part of the government's plan to reduce income disparity and the Chinese economy's heavy reliance on investment and promote greater consumption by middle- and low-income households.

But with many businesses already being squeezed by rising input costs, wage increases come at a difficult time and are likely to lead to higher overall inflation.

"In just the last three months we've already had to raise entry-level starting wages 60 per cent just to get people to come to a job interview," said Jade Gray, chief executive of Gung Ho Pizza, a Beijing-based gourmet pizza delivery service. "With rising rents, the much higher cost of ingredients and now wage inflation, many businesses in the services industries are going to find it impossible not to pass on much higher costs to consumers."

With its latest wage increase Beijing now has the highest minimum wage in the country, ahead of Shanghai on Rmb1,120 per month but other cities and provinces, including the manufacturing hub of Guangdong, are already eyeing further increases early in the new year.

The government estimates that Beijing's minimum wage rise will benefit nearly 3m people.

In the separately-ruled Chinese territory of Hong Kong, legislators in November set the city's first-ever minimum wage at HK$28 an hour. The new wage, which takes effect in May 2011, followed months of public consultation and debate amid growing concern in the city about widening income disparities.

1 comment:

Joe Nuno said...

As Republicans Vow Repeal, More Health Care Reform Benefits Kick In
Mike Hall, Jan 3, 2011
House Republicans have put repealing health care reform at the top of their to-do list.  Their fight against the Affordable Care Act is not only pure partisan politics, it is also an attack against the millions of regular working people and seniors who benefit from the new law.
Republicans want to repeal the new law’s  guarantee that children with pre-existing conditions cannot be denied coverage. Republicans want to repeal new rules limiting insurance company premium hikes and requirements that they spend money on health care, not CEO perks.
According Kaiser Health News, several new provisions of the Affordable Care Act kicked in Jan. 1 that could benefit tens of millions of us.
If your insurance company doesn’t spend at least 80 percent of its premium dollars on health care, it may be forced to give rebates to you and other consumers. Republicans want to repeal that.
Prescription drug costs could shrink $700 for a typical Medicare beneficiary in 2011, as the law begins to close the donut hole. The National Council on Aging estimates the savings could reach $1,800 for some.  Republicans want to repeal that.
Medicare enrollees will be able to get many preventive health services—such as vaccinations and cancer screenings—for free starting this month. Republicans want to repeal that.
Medicare beneficiaries also can get a free annual “wellness exam” from their doctors who will set up a “personalized prevention plan” for them. Republicans want to repeal that.
Companies with fewer than 100 workers who start wellness programs focused on nutrition, smoking cessation, physical fitness and stress management will be eligible for grants from a $200 million federal program. Republicans want to repeal that.
More than 4,000 employer health plans have been approved for aid to offset health care costs of early retirees. Republicans want to repeal that.
Cost savings, anti-fraud provisions and other requirements will keep Medicare financially solvent. Republicans want to repeal that.
More provisions will be phased over time, including tax credits and other cost-sharing devices that will make health coverage more affordable for as many as 28.6 million low- and moderate-income workers and a $1 trillion cut in the deficit. Republicans want to repeal that.
The House will begin debate of the Republican plan to repeal health care reform later this week and a vote is expected next week. We’ll keep you posted.