Conform To The Trend Of Rising Labor Costs

Recently, some enterprises in the Pearl River Delta have raised salaries, which has aroused concern about the rising cost of labor.

Although the absolute value of 20%~30% raises is not big, but from the angle of enterprise management, in the long run, it is also a small increase.

The rising cost of labor in China is an obvious phenomenon.

Economic development is gradually changing from low cost stage to high cost stage. One important aspect is the continuous increase of human cost.

Labor costs, environmental costs, resource depletion costs and other joint role in promoting economic development into a high cost era.

In view of the salary increase of related enterprises in the Pearl River Delta region, there is a voice that the increase in wages of a small number of enterprises is likely to produce a demonstration effect and lead more enterprises to join them. When the general wage surge begins to appear, the chain reaction will be more obvious, and may even affect the investment environment in many places.

There is no reason for such a sound. How should we view the salary increase of a small number of enterprises and how to look at the continuous rise in the cost of manpower in the future? This is a real problem.

Historically, since reform and opening up, China has been relying on low-cost human resources and many other advantages, making "made in China" a place in the world market.

Of course, the "made in China" here includes not only the products of the so-called national enterprises, but also the output of overseas capital invested in China.

Low labor costs bring the price advantage to the enterprises, and then turn into the competitiveness of the overall cost performance. This has led to a large number of employment, but also promoted the development of China's economy.

However, for a long time, a basic pattern is that capital is in a strong position relative to labor.

Judging from the macro trend, since the reform and opening up, under the rapid growth of the total economic volume, the proportion of workers' wages in GDP has not increased correspondingly, but on the contrary, it has been decreasing year by year.

Specifically, this proportion dropped from 17% in 1980 to 15.8% in 1990, further down to 10.7% in 2000. At present, it is basically at 11% level.

Under such conditions and background, a modest increase in wages will not have a significant impact on the rise in the cost of the enterprise, nor will there be any problem of wages eroding profits.

No matter what kind of pressure is behind the rise in corporate wages, the slight increase in the price level of labor, as pointed out by some labour scholars, is a compensatory response to long-term low wages.

More than two years ago, the revision of labor contract law is also a matter of adjusting labor relations and making the situation more reasonable.

There is no doubt that workers should share the fruits of economic development rationally. Otherwise, they will not only affect their enthusiasm, but also restrict the upgrading of domestic consumption level.

The remuneration of laborers is correspondingly reasonable with economic development, which is in line with the goal of building a harmonious society.

Of course, the rise of labor costs can not take the road of radical, which also has the problem of the game of interests between the two sides.

Therefore, from the perspective of local governments, when we clearly see the changing trend of labor prices in China, we should rationally recognize the economic and social significance of increasing wages.

Frankly speaking, some local governments may be worried that enterprises in the local area will reconsider the location of investment in the case of rising labor costs.

Under the control of this worry, there have been too many government officials who are too Pro business, or even artificially suppress and distort labor prices.

At this time, the government departments should conform to the trend of rising labor costs, rather than artificial suppression. In fact, such a trend is not blocked by human factors.

From a historical perspective, the growth way at the expense of overdraft will inevitably come to an end.

In a certain sense, the reasonable rise of labor prices will promote the pformation of the mode of economic development and promote the adjustment of economic structure.

If China wants to move from a big production country to a big consumer country, if the public lacks the necessary consumption power, the economic pformation is nothing but empty talk. If China wants to achieve rebalancing in the world, it will inevitably need to change the current dilemma of becoming a key anti-dumping country.

This means that we should not regret the gradual loss of the advantages brought by cheap labor, but also reflect on the pformation of the "China assembled" business model.

It is true that this issue has been discussed for a long time, but we have to say that in recent years, action has failed to catch up with it.

From this perspective, the rise of labor costs provides an opportunity to push the pformation of low value-added business models, which is also the pformation process of China's economic development mode.

In view of this, how should the cost be digested after the company raises wages and labor costs rise? In our view, efforts can be made at least two ways to offset the rising cost.

Fundamentally, we must rely on institutional innovation and technological innovation to enhance the ability of the market to allocate resources.

Specifically, on the one hand, we must break the suppression of monopoly interest groups to the overall vitality of the economy, eliminate the government's improper intervention in the micro field, and effectively improve the legal system and restrict the power. The vitality of the institutional innovation will greatly dispel the challenges brought by the rising cost; on the other hand, an effective way to break through is to rely on technological innovation.

In the process of economic growth, if the contribution rate of technology is improved, it will reduce the dependence on labor and capital.