Manufacturing earnings and compensation in China: on the basis of published earnings data, estimated compensation ratios, and estimated hours, China's manufacturing employees averaged about 57 cents compensation per hour worked in 2002

Monthly Labor Review, August, 2005 by Judith Banister

The three provinces of the Yangtze River Delta have a wide range of urban manufacturing earnings and labor compensation. As shown in table 4, Shanghai's 1.3 million city manufacturing workers are comparatively highly paid in the Chinese context. Their 2002 labor compensation averaged about U.S.$4,078, and hourly compensation was approximately U.S.$1.87. Manufacturing workers in Zhejiang, Jiangsu, and Guangdong had lower labor compensation than Shanghai, but still higher than the national average.

These city manufacturing earnings statistics for China's leading export-manufacturing regions do not yield a true picture of the earnings paid by manufacturing enterprises in those provinces. In the fast place, it is not certain that the earnings of most migrant manufacturing workers in the cities of the aforementioned provinces are included in the urban manufacturing earnings data. Second, no wage data are reported for the so-called rural manufacturing workers by province, nor are TVE manufacturing earnings figures reported by province. However, reported earnings statistics are available by province for TVE industry (gongye) employees. Nationally, 92.4 percent of TVE industry workers are manufacturing employees, and wages of these manufacturing workers are similar to those of other industry workers. Therefore, TVE industry earnings by province can be used to estimate manufacturing earnings.

Table 4 also reports 2002 TVE industry earnings and derives labor compensation for the same regions. Like their urban counterparts, TVE industry workers in these regions have higher earnings than the national average. Shanghai and Zhejiang TVE industry employees were the highest paid, earning U.S.$0.71 per hour in the Shanghai suburban and rural areas and U.S.$0.60 an hour in Zhejiang Province's rural and industrial zones outside of its cities. Noncity industry workers in Jiangsu and Guangdong Provinces were not as well paid, receiving U.S.$0.48 and U.S.$0.49 per hour, respectively.

Earnings of migrant manufacturing workers

In theory, if a worker has migrated from a village to a city and is employed in a manufacturing enterprise, the employer should report the migrant's job and earnings in the "manufacturing staff and worker" category. But in practice, in most cities of China, migrants who do not possess permanent-resident documents are apparently not eligible for urban social insurance and housing benefits:

   Contracted rural migrant laborers are supposed to be
   covered [in the social basic pension system] as well.
   While the inclusion of rural migrant labor in urban areas
   would also reduce the dependency ratio because of the
   concentration of migrant laborers in the young working
   age groups, present weaknesses in administrative capacity
   make it questionable whether these workers will ever
   draw benefits, especially if they return to rural areas or
   move on to other urban areas. In some cases, the pension
   contribution is simply an added tax from which the
   migrant will derive no benefits. (45)