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industry were 8,345 yuan. (See table 9 and discussion that follows.) Increasing this figure by 8 percent to adjust for employer social insurance payments on the part of employers results in a total average labor compensation of 9,013 yuan, or $1,088, in 2002. For those factories whose workers put in 4,000 hours of production work that year, per hour average labor compensation was $0.27. This illustration emphasizes why it is important to determine the actual average number of hours worked in each year for both city and TVE manufacturing employees.

Data from China’s 2000 census confirm that, generally speaking, manufacturing employees in China work a lengthy week; at least, they did during the last week of October 2000. The census indicated that 58 percent of manufacturing workers had worked 6 or 7 days the previous week; however, the census may have classified tens of millions of part-year, seasonal manufacturing workers from rural areas and small towns as farmers.127 Such rural (probably called TVE) manufacturing workers would put in far fewer hours in manufacturing per year than those counted in the census or those working year round in coastal-zone factories. Thus, the percentage of workers who worked 6 or 7 days probably was lower than 58 percent.

It is not known whether manufacturing employees whose factories sell only to China’s domestic market work about the same number of hours per week, month, or year as does the average employee of export-oriented factories. Of China’s reported 70.9 million TVE manufacturing employees in 2002, for example, only 13.4 million were reported to be producing for export, while 57.5 million were apparently producing only for the domestic market.128 An adequate estimate of average annual hours worked must take into account both of these categories of manufacturing workers--those who produce for export and those who produce for domestic sale.

For China, legal limits on working hours or overtime hours are not likely to yield realistic estimates of actual hours worked. Factories routinely report that they are abiding by the regulations when, in fact, employees are working more hours per day, and many more hours per week or month, than the statutory limits. One purpose of the double bookkeeping in China’s factories is to report compliance with laws on minimum wages and maximum permissible overtime hours when, in reality, the factory routinely violates the laws. Generally speaking, grassroots investigators report that the factories do not claim that they paid more total earnings per month or per day to the employees than they actually paid; rather, they underreport the actual hours worked to earn the reported monthly or daily income.

Hourly labor compensation in manufacturing

Despite the limitations on estimates of annual hours worked, it is possible to produce reasonable estimates of hourly compensation costs for manufacturing workers in China, as is shown in table 8. According to these estimates, compensation for employees of urban manufacturing units was about U.S.$0.95 per hour of work and for TVE manufacturing employees was about U.S.$0.41 per hour.

The analysis presented herein combines labor compensation estimates for the reported 71 million TVE manufacturing employees and the 30 million manufacturing employees of urban units to derive estimates for annual, monthly, and hourly labor


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