The Chinese government has released a plan aimed at increasing urban minimum wage by 6% annually or 13% totally through the end of 2015.
Twenty-four provinces and cities raised their minimum wages in 2012, according to the Ministry of Human Resources and Social Security.
The latest announcement came after a decision made by electronics manufacturing giant Foxconn to allow its workers to choose their representatives to the labor union.
This decision is viewed as a big step forward as labor unions in China are controlled by the government and weld extremely limited power of collective bargaining.
Chinese factory workers have been better off being informed of their rights over the past five years, thanks to a national labor contract law passed in 2008.
Foxconn will set an example for other companies – especially apparel and footwear makers – to improve workplace conditions and raise pays, Citi Research argues in a report on the issue, adding that the change is likely to be slow as independent labor unions are still banned by the government.
Labor costs make up 20-25% of total expenses for apparel and footwear manufacturers in China, and raw materials account for around 60%, according to the Citi Research report.
China was the United States' largest footwear supplier responsible for 86.2% of total imports in 2011. However, rising labor costs and import restrictions are prompting global manufacturers to relocate plants to Southeast Asian countries such as Vietnam, Bangladesh and Cambodia, and even back home to the United States, where footwear production increased 7.9% in 2011, as manufacturers sought to take advantage of quicker logistics.
List of China Minimum Wage Per Month
Note: The numbers do not include employer's contribution to social welfare, which is compulsory in Shanghai but not in other regions.
Shenzhen, Guangdong: ¥1500
Jiangsu, Hebei: ¥1320
Fujian and Inner Mongolia: ¥1200
Hunan and Heilongjiang: ¥1160
Ningxia, Yunnan: ¥1100
$1 = ¥6.24
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