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

THIS ARTICLE HAS COMBINED EMPLOYMENT AND EARNINGS DATA for China's urban manufacturing workers and for the noncity TVE manufacturing workers in order to derive approximations of annual, monthly, and hourly labor compensation for urban, noncity, and all-China manufacturing employees. Reported earnings and labor compensation data have been adjusted separately to yield urban data and TVE data. As of 2002, the latest year for which adequate earnings data are available, average labor compensation for 30 million of China's urban manufacturing employees was approximately U.S.$0.95 per hour, while the reported 71 million manufacturing employees in TVE'S outside the cities averaged about U.S.$0.41 in labor compensation per hour of work. Combining the labor compensation of manufacturing workers in cities and in TVE'S to derive an all-China estimate results in average labor compensation of approximately U.S.$0.57 per hour of work for 101 million manufacturing workers in China.

The following items should have high priority for future data collection in China and future research on hourly labor compensation in China's manufacturing sector:

1. Data on hours worked. For the important goal of calculating average hourly labor compensation in manufacturing in China, a high priority is to get better data on actual hours worked by employees in the manufacturing sector. China's government could itself gather and publish more systematic data on this important measure, and scholars should also emphasize gathering information on it.

2. National economic census. During the year 2005, with reference year 2004, China conducted its first national census of the economy. This undertaking is expected to refine, correct, and update data on labor compensation received in manufacturing. When results of the economic census become available starting in late 2005, the new information should be used to update the estimates in this article.

3. Noncity manufacturing labor compensation. Much more data collection and analytical research are needed to fill in some of the missing information on rural and town manufacturing earnings and total compensation.

4. Labor force surveys. China needs to design, carry out, and publish results of labor force surveys using international standards and definitions. Such surveys should cover the whole country and should collect and publish data on earnings and total compensation. China reportedly will begin a regular labor force survey in 2006, the results of which will subsequently be published.

Notes

ACKNOWLEDGMENTS: This article was written under contract to the U.S. Department of Labor, Bureau of Labor Statistics, in order to further the knowledge of China's manufacturing earnings and labor compensation statistics. The views expressed are those of the author and do not reflect the views of the Bureau. This research project has benefited from the valuable feedback of colleagues in China and in other countries on China's economy and Chinese business practices. In particular, economists Loraine A. West and Nicholas R. Lardy served as expert discussants at a November 2004 BLS seminar on an early draft of the full report on the BLS Web site. Official statistical organizations in China have helped to correct some errors and point toward missing pieces of information. BLS economists--in particular, Constance Sorrentino, Chris Sparks, Elizabeth Taylor, Aaron Cobet, Susan Fleck, Marie Claire Guillard, Gary Martin, Ann Neff, and Erin Lett--have provided their expertise and support. Patricia Capdevielle, formerly of the Bureau of Labor Statistics, provided expert advice and comments. I would especially like to thank Xing Yan (LeLe), Xing Shuo, Song Jintao, Xing Shuqin, Wang Jianping, Li Fang, Xue Jianwen, and Robert Boyer for their dedicated research assistance. The opinions, analysis, and conclusions expressed in this report are solely mine, and any mistakes or errors remain my responsibility.