- CNTV English - CCTV News

Homepage > News > Biz >

Who pays for wage rises?

01-11-2012 15:40 BJT

The Shenzhen city government will raise its minimum monthly wage 13.6 percent in February, from 1,320 yuan ($210) to 1,500 yuan, despite warnings from manufacturers that it will put even more pressure on exporters already reeling from a sharp decline in orders from the United States and Europe.

China's economy faces formidable challenges in 2012 as the developed economies remain ensnared in their debt crises and the rebalancing of the economy from export-led to consumption-led growth is still in its early stages.

Raising the minimum wage not only eases wealth inequalities, it also promotes consumption and forces enterprises to improve their management and boost innovation.

But who should pay for an increase in the minimum wage?

There is no doubt that employers should pay for the cost of labor. But the forecast for small businesses, a main driver for economic growth, is fairly gloomy. So it will be counterproductive to place the onus for wage rises solely on enterprises.

Therefore, raising the minimum wage should be accompanied by measures to reduce the tax burden on small and medium-sized enterprises and improve their business environment.

The governments' tax revenue has grown faster than residents' income for years, and the fiscal authorities certainly have the wherewithal to reduce the tax burden on small and medium-sized enterprises.

In this sense, improving the environment for small and medium-sized enterprises is the premise for enabling worker to enjoy the fruits of the country's steady and rapid economic growth.

What is urgently needed now is concrete reforms of the fiscal and taxation system, especially structural tax reductions that will enable small and medium-sized enterprises to meet the higher costs of labor.

Editor:Wang Chuhan |Source: China Daily

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program