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May 22, 2013

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Shanghai workers cash in despite slow economy

THE average wage of workers in Shanghai exceeded the city's economic growth rate in the past five years, largely due to rising living costs and labor shortages.

A report released yesterday by the Shanghai Federation of Trade Unions showed the average wage of workers in Shanghai rose from 34,707 yuan (US$5,657) a year in 2007 to 51,968 yuan in 2011. The average annual growth of 10.6 percent was higher than the economic growth rate of 8.8 percent, it pointed out.

The report said wages rose rapidly as the city government paid high attention to perfect the income distribution system and improve the workers' pay level.

"The wage growth is corresponding to China's plan of doubling the income of urban and rural residents by 2020," said Jennifer Feng, an HR expert with online job hunting firm

"Shanghai's living cost is the highest in the country," Feng said. "The cost of basic living necessitates such as food, house and transportation all add to the burden. That is why many workers are stressed even though they have got pay hikes every year," Feng said.

On the other hand, companies in Shanghai are forced to raise salaries as they cannot find the workers they want. Feng said China was aging rapidly due to its one-child policy and has begun to lose its demographic dividend, resulting in labor shortage and insufficient young workers.

Migrants outnumber locals

The report said the number of migrant workers outnumbered local workers in Shanghai for the first time in 2010.

"Young migrant workers have been the major workforce of first-line jobs such as waiters, logistics and assembly workers in Shanghai. To some extent, their salary expectations are lower than locals and migrant workers are more hardworking as they want to survive in the city," Feng said.

Census statistics showed the number of migrant workers in the city was 6.73 million in 2010, accounting for 52.6 percent of the total working population that year.

The report surveyed more than 5,000 workers from 500 local companies. Nearly half of the respondents said their salaries were raised at least three times between 2007 and 2011.

"The raise was mostly given to low-level positions to stop them from quitting," Feng said, adding that the hikes were wider in private and foreign-invested companies than state-owned companies.

More than 90 percent of workers claimed they had not changed their jobs or did so only once in the five years. The figure was up 10 percent from five years ago, the report said.

However, Feng said workers were beginning to move around more frequently in the last few years. "The wage growth wouldn't have happened that rapidly if there was no moment for jobs," she said.


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