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Wages and disposable income in China increase by about ten percent in 2012

Despite long-standing complaints by business-owners about severe wage inflation in China, figures released by the National Bureau of Statistics today show that the disposable income of urban residents increased by only 9.6 percent last year after adjusting for inflation.

The net income of rural residents increased by 10.7 percent in real terms, remaining at one third the level of urban residents. The average annual disposable income in the cities last year was 24,565 yuan compared with just 7,917 yuan in rural areas, the bureau said.

Wages for urban residents increased by 12.5 percent in 2012, while the wages of rural residents rose by 16.3 percent.  At the end of the year, the average monthly salary for migrant workers employed outside their home area stood at 2,290 yuan, an increase of 11.8 percent, unadjusted for inflation.

The global economic slowdown last year clearly impacted wage levels in China last year, with the country’s most economically advanced province Guangdong keeping its minimum wage frozen throughout the year. Indeed in the second half the year, China saw far more disputes over wage arrears and factory closures than over demands for higher wages.

It was only at the very end of the year that workers started to demand higher salaries again and regional governments such as Beijing and Zhejiang decided to raise the minimum wage. With inflation and food prices in particular on the rise again this year, pressure for higher wages is expected to increase once more in the coming months.

The National Bureau of Statistics also revealed that the total number of rural migrant workers in China increased by 3.9 percent to reach 262.6 million in 2012. As expected, given the movement of industry inland, there was a much higher growth rate for rural labourers employed inside their home area, 5.4 percent, compared with a 3.0 percent increase for those employed outside their home area. The total number of migrants employed outside their home area stood at 163.3 million with 99.3 million employed closer to home.

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