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September 8, 2009

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Home » Business » Economy

Spending power rises on low inflation

EMPLOYEES at international firms on China's mainland enjoyed more disposable income this year than last year due to a drop in inflation, according to a report released yesterday by Hay Group, a global consulting firm.

Though the average salary increase over the past 12 months from August 2008 was 5.3 percent, which is much lower than the 10.2 percent rise last year and 9.1 percent in 2007, the real wage inflation this year is 5.9 percent, even slightly higher than that before the financial crisis because of the high consumer prices in the past two years.

Real wage inflation is the average base salary movement minus Consumer Price Index, the main gauge of inflation.

"Many employees may complain they haven't got salary increase since last year. In fact they have already enjoyed a rise in disposable income, even higher than last year, due to the lower CPI," said Henry Sheng, a Hay executive.

Zhu Qingyang, an official of Shanghai Human Resource Agency Association, said: "It is difficult to foresee an optimistic future in the salary increase because of the current uncertain economic environment. We should wait and see."


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