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Pay gap narrows as industrial structure changes

He Na
Updated: Feb 28,2015 11:36 AM     China Daily

The wage gap between different regions is gradually narrowing as changes to the country’s industrial structure and regional economic development programs take effect, a new report says.

Despite the changes, Beijing and Shanghai still pay the highest average wages, according to the study by the Ministry of Human Resources and Social Security.

The reduction of the regional wage gap follows the launch of strategies to develop the West and Northeast.

Though the gap has been narrowing, it remains large, the Wage Development Report (2013-14) says.

The overall pattern remains unchanged, with higher wages being paid in the eastern regions while incomes remain lower in the central and western regions.

In 2010, the average wage in the best-paid region was 2.38 times the average wage in the lowest-paid region. By 2012, the ratio had fallen to 2.33, and it has continued to fall further.

Previously, the wage gap had widened after the launch of the reform and opening-up policy at the end of the 1970s because of the country’s uneven regional economic development. By 2008, the ratio had risen to 2.69.

Regional wages can be divided into four pay levels, with Beijing and Shanghai continuing to lead the national payroll.

In 2012, the annual average wage of workers in urban areas in the two cities broke through the 70,000 yuan ($11,160) barrier, significantly higher than the national average.

The second tier has five provinces and regions including Tianjin and Guangdong, and their annual average wage in 2012 was more than 50,000 yuan. Thirteen provinces and regions, including Chongqing, Shanxi and Liaoning, belong to the third tier, while the other regions are in the fourth tier. Wages in some of the fourth-tier provinces were below the national minimum wage.

Some provinces and regions where wage levels were previously low, such as Gansu and Heilongjiang, have made progress.

However, the report says wages are increasing more slowly in Shanghai, Liaoning and Hebei. Shanghai has lost its crown to Beijing as the region that pays the highest wages.

Sustainable regional economic development depends on a fair approach to wages, the report says.

Liu Xuemin, director of the ministry’s Institute of Labor and Wages, told People’s Daily that the government should tighten its macro-control of wages to narrow the regional gap further.

“We should keep expanding investment in the central and western regions to balance development,” he added.

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