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MANUFACTURING EMPLOYMENT AND COMPENSATION IN CHINA - page 50 / 106

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equivalent of PPP U.S.$2.08 per hour of work to spend in Jiangsu province, $2.13 in Guangdong province, $2.60 in Zhejiang and $3.05 in Shanghai Municipality. The city manufacturing workers take home on average the equivalent of PPP U.S.$3.02 in Jiangsu province, $3.46 in Zhejiang province, $3.86 in Guangdong province, and $5.66 in the city districts of Shanghai, in terms of the purchasing power of their cash income. We can therefore summarize that rural (noncity) manufacturing workers in China’s main export regions receive take-home pay that is equivalent in purchasing power to about 2-3 U.S. dollars per hour of work, while city manufacturing workers in the main exporting provinces earn the purchasing power equivalent of 3-6 U.S. dollars per hour.

Earnings of migrant manufacturing workers

In theory, if a worker has migrated from a village to a city and is employed in a manufacturing enterprise, the employer should report the migrant’s job and earnings in the “manufacturing staff and worker” category. But in practice, in most cities of China, migrants who do not possess permanent-resident documents are apparently not eligible for urban social insurance and housing benefits:

Contracted rural migrant laborers are supposed to be covered [in the social basic pension system] as well. While the inclusion of rural migrant labor in urban areas would also reduce the dependency ratio because of the concentration of migrant laborers in the young working age groups, present weaknesses in administrative capacity make it questionable whether these workers will ever draw benefits, especially if they return to rural areas or move on to other urban areas. In some cases, the pension contribution is simply an added tax from which the migrant will derive no benefits. 134

In principle rural migrants and other contract workers who work in urban enterprises should have social insurance coverage. In fact, enforcement is weak. As rural migrants have few legal rights, they do not report this abuse. In addition, given their uncertain length of tenure in the area, they face a risk of not getting benefits due. These groups may prefer higher wages over a tenuous insurance contract. 135

There is increasing informal evidence that published urban earnings data exclude the pay of most migrant workers.136 The first section of this report137 referred to published 2002 statistics on manufacturing employment in urban units, totaling 29.81 million, that included 4.59 million rural-to-urban migrants whose household registration was still in rural areas. Probably, their reported earnings were part of the published average earnings data for urban manufacturing staff and workers, but very likely, many millions more rural-to-city migrant manufacturing workers were not in the reported urban manufacturing employment or earnings data. There are many possible reasons for such exclusion, including the fact that many cities and municipalities in China do not consider rural-to-urban migrants to be real urban or municipal employees.138 It is not known

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