BOFIT Viikkokatsaus / BOFIT Weekly 2019/47
Lower growth in Chinese real wages. The 2020 Global Salary Forecast from the American consulting firm, Korn Ferry, sees average global real-wage increases to accelerate to 2.1 % next year. Growth remains highest in Asia, where on-year growth in real wages should accelerate to 3.1 %. The slowdown in Chinese real-wage growth, however, is expected to continue next year.
Korn Ferry’s assessments are based on wage forecasts provided by their client organisations in surveyed countries. Nominal wages in China are expected to rise by 6 % next year, effectively matching this year’s wage forecast. However, with inflation picking up, real-wage growth in China should decline from 3.2 % this year to 2.9 % next year. While these are merely forecast figures, they indicate a general slowdown in real-wage growth. In Korn Ferry’s client organisations at least, wage-increase expectations appear to be much lower than official output growth figures.
NBS on-year figures show that the 2018 nominal average monthly wage in public organisations in urban areas was 6,870 yuan (880 euros), a 10.9 % increase from 2017. The average wage in 2018 rose by 8.8 % in real terms. The average private-sector wage was just over 4,100 yuan (530 euros).
Official figures indicate that last year the average wage at a public-sector-owned manufacturing firm was around 6,000 yuan (770 euros) a month. According to media reports, the basic wage at a privately held electronic assembly plant is currently on the order of 3,000 yuan (380 euros) a month. With overtime, monthly earnings rise to 4,500–5,500 yuan (580–700 euros) a month.