Labor costs set to rise

The new minimum monthly salary standards in Beijing, Shanghai and Tianjin for 2014 went into effect Tuesday.

Seven municipalities and provinces including Southwest China's Chongqing, Northwest China's Shaanxi and East China's Shandong have raised their minimum salary levels for this year so far, and Shanghai ranks the top in terms of minimum wage.

Workers in Shanghai are now entitled to get a minimum of 1,820 yuan ($296) as a monthly salary and 17 yuan as an hourly wage, an increase of 12 and 21 percent respectively over last year.

Beijing ranks second after Shanghai in terms of minimum hourly wage of 16.9 yuan, however, in terms of minimum monthly salary, falls behind Shenzhen and Tianjin which set the bar at 1,808 and 1,680 yuan respectively.

The minimum monthly sa-lary is 1,560 yuan in Beijing.

Chongqing ranks the lowest in the list with the new minimum salary of 1,250 yuan per month and 12.5 yuan per hour.

Local governments normally update and raise the bar for minimum wages annually to ensure the basic living standards of workers in view of inflation, as well as to attract new workers as a result of the slowing supply of laborers due to population ageing.

But the increase in minimum wages adds much more to the labor cost for firms and enterprises as employers often have to offer higher salaries to woo workers. A large number of manufacturers in the deve-loped coastal regions, known as export hubs, face difficulties in recruiting enough migrant workers after each Chinese -Lunar New Year.

With the impact of the -rising labor costs, many low-end, labor-intensive manufactu-rers such as garment and shoe makers have moved factories to Southeast Asian nations where labor cost is cheaper.

The average growth of minimum salaries is 22 percent among the 24 provinces and municipalities that raised the bar in 2011. The growth rate is 20.2 percent for 25 provinces and municipalities in 2012 and 17 percent for 27 local governments in 2013, according to the Ministry of Human Resources and Social Security.