Beijing Issues Pay Raise Guidelines

Chinese people are feeling the pressures of rising living cost.

In May, China's consumer price index hit a three-year high.

And food prices have jumped twelve per cent from a year ago…

To cope, the Beijing Bureau of Human Resources and Social Security

Has advised companies to raise their employees' income by five to 10 percent.

Some welcome the guidelines.

But others question how effective they will be.

Allie Johnson reports.

Dai Xing works at a property management firm in Beijing.

He says living costs are rising so fast…he can't keep up.

"The food and gas prices increase almost every week. So it's…it's a difficult time for me, actually, now."

Mimi Zhang is feeling the price hikes too.

She's a supervisor at Bimbo Food Company in Beijing.

"I need to pay more for my flat. And the food is much more expensive than before. Especially when I shop in supermarkets – the vegetable and the meat are everyday more expensive than before."

To ease the pains of inflation and to go in line with the country's economic growth targets,

the Beijing Bureau of Human Resources and Social Security…

is advising companies to increase employee wages by five to ten percent.

The bureau says the guidelines are optional…

and should be adjusted to a company's own financial situation.

Du Yang is a research fellow at the Chinese Academy of Social Science's Institute of Population and Labour Economics.

He says the new guidelines are based on market research…

and intended as an information service.

"The government can collect information and provide to employers and employees so they can make decisions based on the guidelines."

Du says the guidelines can help employees make sure they're being paid in line with current market averages.

And help employers know what the markets are doing.

"We are facing labour shortages now. If the enterprises want to hire workers, they have to raise the wage according to the market situation."

But some employees don't expect the guidelines

to help them make more money.

Dai Xiang says that public-owned enterprises might follow the directive…

But private employers like his probably won't.

"It's not a law. Not a regulation. Just a guideline. And employers of such companies – they don't do much about it. So for those people, it makes almost no sense."

Mimi Zhang says on her middle-class salary, she could cover her costs with a ten percent raise.

But she says for people whose current wages are low,

a five to ten percent increase doesn't add up to much.

"These new guidelines will be helpful for the high income people, maybe. But for the low income people, that will be nothing."

Du Yang from the Chinese Academy of Social Sciences says the guidelines are just there to provide information…

Not to tell companies how to spend their money.

"Fundamentally, the wage should be determined at the firm level, and should be decided by the negotiation between employers and employees. So I think the role of the guideline is to guide, and not to order."

Dai Xiang says he hopes the government will implement some harder measures to ease rising living costs, like lowering taxes.

For CRI, I'm Allie Johnson.