Guangdong reportedly postpones minimum wage increase

A planned increase in Guangdong’s minimum wage of up to 20 percent, which was scheduled to go into effect on 1 January next year, has been put on hold, Hong Kong’s Ming Pao newspaper reported today.

The move is not unexpected given the contraction of the manufacturing sector in the Pearl River Delta, the cooling of inflation and the intense pressure put on the Guangdong government by the Hong Kong business associations, who claimed that an increase in the minimum wage would add seven percent to their overall costs.

The key issue for many factory workers however is not so much their basic wage, which is usually set at or just above the minimum wage, but rather the lack of overtime pay, and the cutting back on allowances and bonuses, which are now severely reducing their pay at the end of the month.

The Chinese authorities are searching for other ways, apart from raising the minimum wage, to deal with the increasing number of labour disputes across China. The official All-China Federation of Trade Unions has once again emphasized the need for employers and employees to negotiate collective wage agreements, a programme reportedly endorsed by the International Labour Organization’s Asia Director Sachkiko Yamamoto, who told the China Daily that collective bargaining could help workers “enjoy a fairer share of the country's booming economy.”

The central government will also introduce new regulations which it hopes will create a mechanism to resolve labour disputes and act as an early warning system to prevent minor disputes from getting out of hand and resulting in strike action. The Regulations on Consultation and Mediation for Labour Disputes in Enterprises (企业劳动争议协商调解规定) mandate the creation of mediation committees in larger enterprises, comprised of equal numbers of worker and management representatives.

Both the union’s push for collective wage agreements and the new mediation regulations show that the authorities are clearly aware of the need for a better mechanism to resolve disputes and ensure workers’ rights and interests are protected.
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