Wage data is better than you think, but wages are worse
In 2009, the National Bureau of Statistics found itself at the center of a storm of controversy over the wage data. The announcement of an increase in the average wage of 12% for the year was so at odds with the reality of stagnant wages for many and redundancy for many more that it sparked a firestorm of angry commentary.
Here’s a few of the comments I found online:
‘The NBS appears to have increased my salary again, if only they had told my employer’
‘This is a harmonized statistic’
‘This statistic is only about those who work in state owned enterprises, only those who know how to eat out at the public expense every day.’
The final comment hits the nail on the head. With the NBS taking a simple average of salaries from mainly state owned firms, the wage data fails to reflect lower and more variable wages for the many workers who labour in the private sector.
To its credit, the NBS took the criticisms to heart. This year, for the first time as far as I can see, they have published a breakdown of wages by state owned (strictly speaking state owned + public sector, joint venture, listed, and foreign invested companies) and private (which seems to mean small private) operations.
The NBS also explain why the official data for 2009 showed such a large increase in the average wage for the state sector. Apparently the data was biased upward by a large pay rise for public sector workers - including a 16.1% hike in compensation for teachers. Manufacturing workers, even those in the state sector, did rather worse, with only an 8.8% increase in wages.
But the real take away from the data is quite how low wages in the private sector are. For 2009, the average worker in a private sector company was paid just CNY18,200, compared to CNY32,700 for the average state sector employee. What is more, the growth rate of wages in the private sector is lower, just 6.6% compared to 12% in the state sector.
The new wage data is a step forward in terms of transparency and coverage of the statistical system. But it also underlines the gap between the insiders who have benefited most from China’s years of rapid growth, and the outsiders who have not.
You can see the data on state sector wages here and private sector wages here.