SCMP: Mechanism to set delta wage floor urged

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.

HK bosses based in Guangdong want pay guidelines to be 'transparent and predictable'

Denise Tsang
Dec 01, 2010

Hong Kong manufacturers with factories across the border are lobbying the Guangdong government for a mechanism to determine minimum- wage rises to head off demands for bigger pay packets.

Stanley Lau Chin-ho, deputy chairman of the Federation of Hong Kong Industries, has called for a transparent and predictable mechanism after minimum pay was raised by a more-than-expected 20 per cent in May.

His proposal was backed by influential trade bodies such as the federation and The Chinese Manufacturers' Association of Hong Kong, but the Guangdong provincial government has yet to express its opinions.

Lau, who is also a member of the provincial government's policy advisory committee, said: "We expect the minimum wage will be raised again next year, but don't know by how much.

"We want to have a transparent mechanism so that we have a better idea on the extent of increase."

In his capacity as a government adviser, Lau submitted a proposal calling for an annual rise in the minimum wage of 2 per cent on top of consumer price inflation from 2012.

Guangdong's consumer price index rose 2.8 per cent in the first nine months of this year, according to the province's statistics bureau.

However, the central government is contemplating raising the nation's minimum wage by an annual average of 20 per cent over the next five years, or to double it by the end of the 12th five-year plan in 2015 to spur domestic spending and narrow the wealth gap.

The federation recently lobbied Guangdong provincial governor Wang Yang to back a proposal that wage rises be linked to a basket of factors including consumer price inflation.

Ge Guoxing, deputy director general of Guangdong's Human Resources and Social Security department, said on Monday that the province's minimum wage would be raised early next year to attract more labourers, as the province was short of 500,000 workers.

Paul Yin Tek-shing, permanent honorary chairman of the Chinese Manufacturers' Association of Hong Kong, said manufacturers must upgrade their technology and add more value to products to survive.

He pointed out that raw material costs, wages and a stronger yuan had fuelled inflation in factory-gate prices, which in turn lowered the competitiveness of the Pearl River Delta manufacturers.

Lau suspected that surging costs would push about 40 per cent of the estimated 58,500 Hong Kong manufacturers in the processing trade, or those who produce export goods from imported raw materials, out of business.

Lau and the federation want the wage-fixing mechanism to replace two planned government rules, one of which would allow labourers to negotiate pay rises with bosses the other granting them participation in the management of their factories.

China Labour Bulletin spokesman Geoffrey Crothall said the minimum wage and the planned rules to allow workers to collectively negotiate pay rises and participate in the management of factories could not be separated from each other.

"Workers need both," he said. "The minimum wage provides a safety net while the collective-wage- bargaining and democratic-management rule proposals will give them decent work conditions and standards."
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