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MANUFACTURING EMPLOYMENT AND COMPENSATION IN CHINA - page 49 / 106

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These PPP figures give us a feel for the purchasing power of the take-home pay of China’s manufacturing employees. Urban manufacturing workers in China are getting cash in hand that almost U.S.$3 per hour in cash would buy in the U.S., while China’s rural and town manufacturing workers receive less than U.S.$2 in international purchasing power parity dollars. Overall equivalent buying power of cash income for China’s manufacturing workers is about PPP U.S.$2.10 per hour of work.

Manufacturing labor compensation in key export regions

China’s urban manufacturing earnings statistics are reported by province, which facilitates estimating urban manufacturing labor compensation for the leading export centers. Using the same ratio of additional compensation to earnings, namely, 53.8 percent, as in table 8, table 9 adjusts the earnings of urban manufacturing workers to derive annual, monthly, and hourly labor compensation for the city manufacturing workers of four leading provinces in China’s manufacturing import and export trade. (Actual levels of additional compensation as a percentage of earnings vary by province and by municipality, but data are not available to adjust earnings by using different multipliers for the urban manufacturing workers in different provinces.)

The three provinces of the Yangtze River Delta have a wide range of urban manufacturing earnings and labor compensation. As shown in table 9, Shanghai’s 1.3 million city manufacturing workers are comparatively highly paid in the Chinese context. Their 2002 labor compensation averaged about U.S.$4,078, and hourly compensation was approximately U.S.$1.87. Manufacturing workers in Zhejiang, Jiangsu, and Guangdong had lower labor compensation than Shanghai, but still higher than the national average.

These city manufacturing earnings statistics for China’s leading export- manufacturing regions do not yield a true picture of the earnings paid by manufacturing enterprises in those provinces. In the first place, it is not certain that the earnings of most migrant manufacturing workers in the cities of the aforementioned provinces are included in the urban manufacturing earnings data. Second, no wage data are reported for the so- called rural manufacturing workers by province, nor are TVE manufacturing earnings figures reported by province. However, reported earnings statistics are available by province for TVE industry (gongye) employees. Nationally, 92.4 percent of TVE industry workers are manufacturing employees, and wages of these manufacturing workers are similar to those of other industry workers. Therefore, TVE industry earnings by province can be used to estimate manufacturing earnings.

Table 9 also reports 2002 TVE industry earnings and derives labor compensation for the same regions. Like their urban counterparts, TVE industry workers in these regions have higher earnings than the national average. Shanghai and Zhejiang TVE industry employees were the highest paid, earning U.S.$0.71 per hour in the Shanghai suburban and rural areas and U.S.$0.60 an hour in Zhejiang Province’s rural and industrial zones outside of its cities. Noncity industry workers in Jiangsu and Guangdong Provinces were not as well paid, receiving U.S.$0.48 and U.S.$0.49 per hour, respectively.

What is the purchasing power of take-home pay for the manufacturing workers in these exporting provinces? In international dollars, TVE industry workers have the

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