BUSINESS COVID-19 triggers salary woes among China’s private sector employees


COVID-19 triggers salary woes among China’s private sector employees

Global Times

02:18, May 17, 2020


(Photo: IC)

This year it will be nearly impossible for Chinese employees in the private sector to earn as much salary as they did in 2019 because of the unexpected novel coronavirus pandemic, observers predicted.

The average yearly salary of private-sector workers in urban areas increased by 5.2 percent on an inflation-adjusted basis to 53,604 yuan ($7,548) in 2019, while the real average wage in the non-private sector rose by 6.8 percent to 90,501 yuan, according to statistics released by the National Bureau of Statistics (NBS) on Friday.

The salary gap between non-private and private sectors will continue to widen this year as the unprecedented pandemic has forced many small- and micro-sized enterprises with poor cash flows to fire employees, cut salaries or grant unpaid leave to relieve the financial burden, said Su Hainan, a contract research fellow at the China Association for Labor Studies.

"The pandemic has forced lots of small shops and factories to remain closed for days and even months," Su told the Global Times on Saturday. "Under this circumstance, without regular work for almost a season, the salaries of the workers will definitely be lower than last year's."

Nonetheless, the pandemic will cause a much lesser impact on employee's wages in the non-private sector - many are staffers of large state-owned companies, foreign-invested firms, and public institutions, Su said.

"Some high-tech enterprise employees may even enjoy higher salaries this year," he added.

The long-standing wage gap between China's non-private and private sectors is also a result of the differences between the two sectors in industry and employment composition, as most of the domestic private enterprises are labor-intensive, small- and medium-sized, where employees have relatively weaker salary negotiation powers, Su added.

China is facing employment pressure in urban areas, an NBS spokesperson Liu Aihua said at a press conference on Friday.

The country's urban unemployment rate was six percent in April, one percentage point higher than that of 2019. A total of 3.54 million jobs were created in urban regions between January to April, a 1.06 million year-on-year fewer.

To protect jobs and incomes amid the pandemic, analysts suggest the government introduce more detailed and targeted aiding polices apart from the existing supports such as social insurance reduction and exemption.

"The highest priority should be to ensure small and micro companies live on," Su said.

In 2019, Chinese workers engaged in the industry of information transmission, software, and information technology earned the salaries, respectively, 161,352 yuan in the non-private sector and 85,301 yuan in the private sector, according to the NBS data. It is the fourth consecutive year that IT-related industry's average wage ranked top after surpassing that of the finance industry in 2016.

In the non-private sector, the average salary of scientific research and technology service industry surpassed that of the finance industry to rank second for the first time in 2019, growing by 8.2 percent to 133,459 yuan.

The finance industry, in contrast, only had a slight increase of 1.2 percent average wage last year, reaching 131,405 yuan.

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