He Wan Man: Rising Wages And Rising Gem

The first is the pay rise caused by Foxconn and Honda. According to reports, up to now, 14 provinces and municipalities have issued the minimum wage standard, with an average increase of 20%. Two, the growth enterprise market is going against the trend. Since the launch of the gem index in June 1st (base point 1000 points), it has reached 1122.18 points on Friday (June 11th), up 12.2%, while the Shanghai Composite Index, the Shenzhen component index and the small and medium board index fell 0.89%, up 0.33% and 3.82% respectively over the same period.

Is there any internal connection between these two things?

The serious imbalance of China's national wealth distribution, the distortion of income distribution and the widening gap between the rich and the poor have attracted the attention of the whole society. In the past twenty or thirty years, GDP has increased by 10%, fiscal revenue has increased by 20%, and resident income has increased by 6-7%, resulting in a significant increase in government earnings and corporate earnings, and a significant decrease in the proportion of labor remuneration. This situation can also be reflected from the earnings of listed companies. Taking Sinopec of central enterprises as an example, net profit in 2009 reached a record 62 billion 190 million yuan, while the reward paid to employees was 28 billion 656 million yuan. According to the 371333 employees of the company, the average profit for enterprises was 165 thousand yuan, the annual income was 77 thousand and 200 yuan, and the ratio of two was 68:32. Sinopec as a central enterprise, as a monopoly industry, its staff income is relatively high, let alone the same period to pay business tax, income tax and so on up to 148 billion 960 million yuan. Because of this, the Chinese government has embarked on a long-term plan for income distribution reform and a plan for doubling national income. Many people have mentioned that the increase in wages is a bad thing for the stock market in the short and medium term, because corporate profits are small and long-term profits are good. Because the income of workers has increased, domestic demand will really start, and China's economic transformation will enter a healthy development track.

Why is the wage surge triggered by OEM companies such as Foxconn? This is because it is a typical labor-intensive enterprise, with only about 400000 employees in Shenzhen Foxconn. The GEM Listing requires "two high and six new", almost no labor intensive traditional enterprises. Looking at the market performance of GEM stocks in June, I found an interesting phenomenon. 86 GEM stocks rose all the way, the top three were +41.67%, +31.44% and +27.08%, all of which were service industries. The last three were Meteno (+1.15%), Nandu power (+1.52%) and Jin Ya Technology (+2.14%), all of which were manufacturing industries. Further analysis of the financial results shows that there are quite different characteristics in the arrangement of employee remuneration compared with traditional enterprises.

First of all, the number of employees is generally low. For example, the highest profit in the gem has reached 292 million 210 thousand yuan in 2009, compared with 590 employees in that year, with a profit of 495 thousand yuan per capita and 92 thousand and 300 yuan per capita in the same year. Because the number of employees is small, even though the absolute amount of salary will not be too large, enterprises are fully capable of digesting, and take the initiative in the future income distribution reform. Compared with the staff of the main board company, tens of thousands of employees are often at large. Adding one point to each person is not a decimal. The two can not be mentioned in the same breath. In fact, most of the employees of GEM companies are only a few hundred people, most of which are only more than 2000 people, including only more than 100 people.

Second, the asset structure is mostly light assets enterprises. The net assets of the GEM companies before listing are more than 1-2 billion, less than tens of millions, and the resources are not large. Moreover, many high-tech enterprises are relatively low in taxes. Therefore, on the income distribution, the three relations between state tax, enterprise profits and employees' remuneration are relatively reasonable. As mentioned above, the top three stocks rose. In 2009, the tax revenue, net profit and employee remuneration of the network technology company were 15 million 530 thousand yuan, 38 million 850 thousand yuan and employee income respectively (63 thousand and 900 yuan per capita income); the tax revenue, net profit and staff salaries of Jifeng agricultural machinery were 12 million 700 thousand yuan, 50 million 230 thousand yuan and 30 million yuan (33 thousand and 900 yuan per capita); the national revenue, net profit and employee salaries of the eye eye were 42 million 820 thousand yuan, 92 million 490 thousand yuan and 92 million 490 thousand yuan (per capita yuan), although the annual income per capita was small, but there was no obvious phenomenon of profits eroding wages.