China

Survey finds a yawning income gap

By Qian Yanfeng (China Daily)
Updated: 2011-01-07 07:39

SHANGHAI - The income gap is widening among different industries in Shanghai, while the proportion between residents' income and the city's GDP is declining, a survey has found.

The survey, conducted by the Shanghai Committee of the China Democratic League, one of the country's eight democratic parties, said people who work in the city's highest-paying industries earn an average of 6.4 times of those who toil in sectors with meager salaries, the local Oriental Morning Post reported on Wednesday.

And a majority of the city's residents, or about 68 percent of its working population, is employed in the lowest-paying sectors, including manufacturing, construction, catering and retail, the report said.

It did not specify which industries attract the best pay.

The survey also pointed to a widening gap between better and poorly paid jobs.

But a spate of news reports have said that people who work in monopoly industries, such as power, energy, telecommunications and banks, are paid the best.

The survey, which will help the committee generate a proposal for the upcoming conference of the Shanghai municipal committee of the Chinese People's Political Consultative Conference, also indicated that the city's minimum monthly salary is low, even though it ranks the second highest among Chinese cities.

The minimum monthly salary is 1,120 yuan ($170). This is about 30 percent of the average salary in the city, a drop from 44.6 percent in 1993.

It falls further when compared to the internationally accepted level, according to which people who receive a minimum monthly salary earn no less than 50 percent of a city's average income.

The survey also found that the income gap is widening within companies, as corporate executives earn an average of five times that of ordinary employees.

In some cases, it is more than 10 times as much.

Most significantly, the survey showed a decline in the percentage of residents' income compared to the city's GDP.

The percentage fell from 41.8 percent in 1990 to 36.4 percent in 2008, while the percentage of government and company revenues compared to the GDP is on the rise.

Over the past 19 years, the government's fiscal revenue has been growing at an annual average of 20 percent, outpacing the city's per capita salary increase, which stands at an annual average of 11.6 percent, the survey showed.

"Governments should take measures to narrow the income gap between different social groups and place a limit on the salary increases in monopoly industries," the committee said in a report on the survey findings.

Since Shanghai has relatively higher living standards than elsewhere in the country, the report suggested the city consider raising the personal income tax threshold to protect the vulnerable.

"The government and State-owned enterprises have the biggest share in the distribution of national income, but more should be directed to residents to narrow China's income gap," said Hu Yijian, a professor of tax studies at Shanghai University of Finance and Economics.

China Daily