Shenzhen to increase pay to ease labour crunch
The Guangdong government has ordered Shenzhen to raise the minimum wage for the second time in two years in the hope of attracting more migrant workers to ease the city's persistent labour shortage.
Shenzhen Labour and Social Security Department deputy director Huang Zaoji said the provincial government had told the city to match pay on offer in the Yangtze River Delta.
The city has not decided how big the rise will be. But Mr Huang said that to match Shanghai's minimum wage it would have to increase basic pay 30 per cent, from 690 yuan a month to 900 yuan.
'We are consulting different parties and collecting information. If we can't match the Yangtze River Delta cities, the labour shortage problem will continue,' he said.
Last year Shenzhen increased the minimum wage from 610 yuan a month to 690 yuan. In the suburbs, minimum pay went up by 100 yuan a month, to 580 yuan. But those increases did not stop migrant workers leaving the Pearl River Delta en masse - since pay has been rising even faster in the Yangtze delta.
The official minimum salary in Shanghai is 690 yuan a month, after deductions for social welfare and medical insurance. To have the same take-home pay, a Shenzhen worker would need to earn 900 yuan a month.
Mr Huang said Shenzhen would also consider providing more social welfare for migrant workers.
The Pearl River Delta is facing a mounting labour shortage as employers lose out to those in the Yangtze delta and elsewhere because their pay is lower and they flout the law on back-pay and other labour issues.
Shenzhen alone is short 100,000 workers, an official report said last year, and businesses have been moving away.
While Shenzhen's economy has grown an average 20 per cent a year in the past decade, its minimum pay has barely changed.
Danny Lam, a Hong Kong manager of a toolmaking factory in Shenzhen, believed the pay rise would drive low-profit, low-skill factories out of Shenzhen.
'I think this is the right move,' he said. 'Shenzhen can't rely on low-level manufacturing forever. It is time for them to phase out those factories. In fact, many have already moved to the outer Pearl River Delta or Guangxi .
Mr Lam said skilled workers in Shenzhen were earning above the mandated minimum wage and would not be affected by the order.
'We pay our workers pretty well but we also have a labour shortage,' he said.
'Our problem is that we can't retain our skilled workers. They go elsewhere to develop their careers. They now can find good jobs closer to their home towns.'
He said the Guangdong government should invest more to upgrade occupational training.
Migrant workers welcomed the news but also said it would not change things much.
'Our factory is already giving us 1,000 yuan a month,' one said. 'People go to the Yangtze River Delta not just for money. They have better opportunities there and the general environment is better.'
