Guangdong Multiplies Wages To Promote Industrial Upgrading

Chen Siyi, director of the Department of labor and wages of the Guangdong Provincial Department of labor and social security, said yesterday that Guangdong will implement the "wage doubling plan" from this year, and make greater use of wage leverage to promote the "double shift" of industries and labor force, so that workers can enjoy the fruits of economic development.

The so-called "double pfer" refers to the pfer of labour intensive industries in the Pearl River Delta to less developed areas, and the pfer of labor force from less developed areas to the two or three local industries and the developed areas of the Pearl River Delta region.

Guangdong provincial labor and social security department recently replied to the proposal of the provincial CPPCC. In order to establish and improve the normal growth mechanism of wages for enterprises and employees, Guangdong has implemented three major plans, such as the "wage doubling plan", which have been implemented for 5 years starting this year. Since 2008, the average annual salary of the staff and workers in the whole province has increased by more than 14% per year, and strive to double the total income of residents by 2012.

Chen Siyi said that the main way to increase the wage plan is to improve the minimum wage system, raise the income level of low-income people, introduce wage guidance lines and labor market guidance prices to guide the growth of enterprise wages, and promote the wage collective bargaining system, so as to solve the problems of wage growth mechanism and decision mechanism.

The background of this plan is that in recent years, the income growth of employees in Guangdong has been relatively slow.

According to the statistics of Guangdong Provincial Bureau of statistics, the average annual wage of workers in Guangdong increased by 9.4% in 2006, while the increase in tax revenue was as high as 34.45%.

In contrast, the national wage increase and tax growth were 12% and 31.4% respectively.

Over the years, Guangdong has never really jumped from an economic province to a strong economic province. The per capita GDP has not been satisfactory. In the past ten years, the average annual growth rate of GDP in the province has been ranked the last in the past ten years. The per capita GDP has dropped from 95.7% in 1996 to 88.9%. in 2006. In recent years, the RMB has continued to appreciate, the implementation of the new labor contract law, the increase of raw material prices, the increase of wage costs, the difficulty in recruiting workers, the suppression of export trade, and frequent adjustment of policies, and so on, have a wide impact on all walks of life.

The shoe industry is also facing the throes of pformation. The industry generally thinks: "this year is the most difficult year for the footwear industry."

Some shoe companies are worried about the wage multiplier plan.

According to the head of a shoemaking enterprise in Dongguan, the goodwill decision of the government is worth affirming. But since last year, many shoemaking enterprises are faced with enormous operating pressure, worried that the rising cost of labor will become the last straw to crush enterprises.

A finance manager of a small household electrical appliance manufacturer in Foshan admitted that under the pressure of rising prices, the company's wages increased by 15%~20% this year, but it still can not guarantee the stability of employees, the profits of enterprises are thin, and the space of wage multiplier is very limited.

In this regard, Chen Siyi also said that for some enterprises in a competitive position in a disadvantageous position, the wage multiplier is indeed a certain degree of difficulty.

"But the wage multiplier scheme is a multiplier for the whole society, and it is the direction and goal of the government's efforts."

Chen Siyi said that in addition to allowing workers to enjoy the fruits of economic development, the wage multiplier plan is intended to increase the use of wage leverage to promote the "double shift" of industries and labor force and accelerate the pformation and upgrading of industries.

Indeed, the author believes that the purpose of the "wage multiplier plan" is to accelerate the elimination of backward industries and promote the "double shift" of industries and labor force by constantly improving the employment of enterprises.

For the Pearl River Delta enterprises, 98% of the enterprises are engaged in processing trade export.

Furniture manufacturing, leather, clothing, footwear and other industries accounted for 25% of the total employment in the province, but only created an increase of 8.5%. These labor-intensive industries have a large amount of labor, and the GDP created by them is very small.

Therefore, it is necessary to pfer some of the backward industries to other suitable places or eliminate them, and the "wage doubling plan" is the "knife" that forces the labor intensive industries such as shoes to shift.

In the current market environment, the operating cost of footwear industry has increased by 20% compared with before. The introduction of this new policy will further increase the labor cost of enterprises. For small and medium profit shoe-making enterprises with a small profit margin, they may choose to migrate or choose to go bankrupt, and the possibility of choosing "upgrading locally" may be less. Thus, the industrial structure of shoes enterprises will be further adjusted, the survival of the fittest will be adjusted, the strong and the strong will be eliminated, the disadvantages of restricting the development of footwear industry will be cut down, and the rational allocation of industrial resources can be optimized.

For the East and West wings and mountain areas, they need to undertake industries pferred from the Pearl River Delta and give full play to their labor resources.

In addition, the central and western regions, such as Chongqing, have obvious advantages in human cost advantages, such as basic matching, communication and pportation facilities, which are suitable for the pfer of labor intensive industries in eastern China.

It is worth pointing out that AOKANG group, China's largest private shoe making enterprise, has invested heavily in building Bishan's western footwear industrial park and has led a trend of "East shoe westward movement".

This is conducive to promoting economic development in backward areas and narrowing the gap between the rich and the poor in the Pearl River Delta region.

For the people in the backward areas, high-quality talents can be pferred to the development of the Pearl River Delta region. On the one hand, they are conducive to the utilization of talents and solve the employment problem; on the other hand, they can gradually improve the situation of the lack of high-end talents in the Pearl River Delta.

For the whole country, the per capita GDP will rise, and the industrial distribution will be reasonable.

The author thinks that the policy orientation of Guangdong's "wage doubling plan" is correct, but it is difficult to implement and may not achieve the desired results for the time being.

Because the legal effect of the minimum wage standard is different, the wage multiplier plan is more of a guiding plan, and the government can not force the enterprise to pursue it.

Chen Siyi said that the government can only continue to formulate minimum wage standards and strengthen the formulation and publicity of wage guidance lines.

In fact, when a new policy is first introduced, it must go through a long or short running in period.

As he said, in the short term, the rise of regional labor costs will hinder labour intensive investment and aggravate the shortage of labor and the relocation of enterprises in low-income enterprises.

But in the long run, the improvement of wage level is a very effective way to promote industrial upgrading.