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MANUFACTURING EMPLOYMENT AND COMPENSATION IN CHINA - page 39 / 106

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The recorded 9 million laid-off manufacturing workers still nominally connected to their manufacturing units averaged a small living subsidy of 2,213 yuan. (See table 6.) This kind of payment might be considered similar to payments of unemployment compensation for laid-off or unemployed workers in developed countries.

In years prior to 2002, earnings data were not published for manufacturing workers outside the cities. For the reported 71 million manufacturing TVE employees in 2002, the Ministry of Agriculture published, for the first time, the total earnings (laodongzhe baochou) paid out for that entire year in all manufacturing TVE’s.104 Average annual earnings per worker are derived in table 6 in the same way that the average annual earnings are calculated for urban manufacturing workers. TVE manufacturing workers averaged 6,927 yuan in reported earnings in 2002, 62 percent of the average earnings that year for employees of urban manufacturing units. Workers in large-scale manufacturing TVE’s had higher average 2002 earnings of 8,899 yuan, 80 percent of the average reported earnings for employees of urban manufacturing units.

What forms of remuneration are included in the average annual earnings figures for China’s manufacturing employees? Exhibit 1 lists all the items whose value is required to be included in earnings data reported by enterprises in urban China for their on-post manufacturing staff and workers, based on written instructions to enterprise accountants and statistical personnel. Most forms of income, benefits, and subsidies in cash and in kind are on this list. Cash salary and earnings payments, housing and transportation provided to workers, meals given to them, and the value of income tax and social insurance payments deducted from earnings and remitted to the government on behalf of employees are all required to be included in the “total earnings” figure, based on relevant reporting regulations.

One group of benefits that is provided by some of China’s manufacturing enterprises to employees, but that is specifically excluded from the earnings figures, is the use of a company medical clinic or the payment of some employee hospital costs. It would seem that this is an important group of benefits which, conceptually, ought to be included in earnings data. But many countries share this shortcoming in earnings statistics, with the result that the Bureau of Labor Statistics specifically excludes the costs of medical clinics in plant facilities from its comparative international data on labor compensation in manufacturing.106 This article does not include any estimation of these particular medical benefits which are missing from China’s earnings data. 105

One important difference between China’s earnings data shown in table 6 and the data used by the Bureau in its international comparisons is that the Bureau data relate only to production workers, while the Chinese data relate to all employees--that is, both production and nonproduction workers. Because production workers typically have lower wages than those of those of nonproduction workers, it is likely that the inclusion of both types of workers in the Chinese data leads to higher earnings levels. However, the production worker data necessary to match the BLS concept are not available for China, so it is unclear how much lower Chinese earnings for production workers would be.

The earnings data do not include figures for the comparatively small privately owned manufacturing groupings and the self-employed manufacturing workers in China’s cities. These two categories of workers together totaled 8.2 million (22 percent of China’s reported total of urban manufacturing workers) in 2002, according to China’s State Administration for Industry and Commerce. This feature of China’s earnings data

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