Source： Global Times [ February 21 2011] 
        By Chen Yang

As a head cashier at Carrefour's Gubei store in Shanghai, Qin Xiang (not his real name) has seen grocery prices rise continuously in the past four years, but the one thing that has not gone up is his salary.

"My salary has stayed at around 1,400 yuan ($213) per month," said the 25-year-old employee. "It was acceptable four years ago but is definitely too low now."

Shanghai's minimum monthly wage was raised from 690 yuan ($105) in 2006 to 1,120 yuan ($170) in 2010, but Qin's wage, meanwhile, has not gone up. "Only workers whose wages are below the minimum wage could get a slight increase," he said.

Qin lives with his parents in a 60-square-meter apartment in Shanghai to save on rent, but he still feels cash-strapped.
"Saving money is impossible, and I even gave up smoking because of the limited wage," he complained.

Wages lag inflation

Qin is not the only victim of inflation and static wages. The monthly wages of more than 6,000 workers, including cashiers, tally clerks and security guards, at about 20 Carrefour stores in Shanghai have barely increased over the past 12 years, the Labor Daily, a newspaper affiliated to the Shanghai Federation of Trade Unions, quoted a human resources manager in Carrefour as saying.

Carrefour offered workers a considerable monthly wage of 1,075 yuan ($163) when it first opened in Shanghai in 1998, slightly above the city's average wage of 1,005 yuan ($153). But now its workers' wages are around 1,120 yuan ($170) on average, which is close to the city's minimum wage level. The retail giant has also declined to accept a collective wage negotiation mechanism since 2008.

Relatively low wages means that the staff-loss rate has become high. "Many people worked for only a few months and then left," said Qin. "So the store keeps recruiting students as part-time cashiers to cope with the labor shortage."

The situation is similar in Carrefour's stores in other areas. A 33-year-old cashier surnamed Mao at a Carrefour store in Shenyang, Liaoning Province, says her monthly wage is just 900 yuan ($137) and has not increased for the last three years.

Despite its workers' unchanged wages, Carrefour's revenue from the Chinese market has increased. Its latest financial report reveals revenue from its stores in China amounted to 4.8 billion ($6.6 billion) in 2010, a 12.5 percent year-on-year rise.

"It's a fact that the retail industry offers low pay for low-skilled positions, but as a multinational company with social responsibility, Carrefour should share its business growth with its employees in China," said Wang Xianqing, a professor specializing in the retail industry at Guangdong University of Business Studies.

Senior management at Carrefour started closed-door talks with the Shanghai Federation of Trade Unions about collective wage negotiation on January 27, according to the Xinhua News Agency, but no details were forthcoming.

"Employees always have a high expectation for wage increases when consumer prices keep rising, but companies usually don't want their profits squeezed by increasing labor costs," Tan Yuming, a researcher with the federation, was quoted by Xinhua as saying. "So the collective wage negotiation mechanism becomes important to balance the two sides' interests."

"I heard our monthly wage might increase by 140 yuan ($21) from next month, as Shanghai is expected to raise the minimum wage again in April," said Qin. "But this slight increase won't improve my life much."

http://en.huanqiu.com/business/comment/2011-03/625142.html

Not-so-cheap labor

2011-02-21  Source:Global TimesAuthor:

As a head cashier at Carrefour's Gubei store in Shanghai, Qin Xiang (not his real name) has seen grocery prices rise continuously in the past four years, but the one thing that has not gone up is his salary.

"My salary has stayed at around 1,400 yuan ($213) per month," said the 25-year-old employee. "It was acceptable four years ago but is definitely too low now."

Shanghai's minimum monthly wage was raised from 690 yuan ($105) in 2006 to 1,120 yuan ($170) in 2010, but Qin's wage, meanwhile, has not gone up. "Only workers whose wages are below the minimum wage could get a slight increase," he said.

Qin lives with his parents in a 60-square-meter apartment in Shanghai to save on rent, but he still feels cash-strapped.
"Saving money is impossible, and I even gave up smoking because of the limited wage," he complained.

Wages lag inflation

Qin is not the only victim of inflation and static wages. The monthly wages of more than 6,000 workers, including cashiers, tally clerks and security guards, at about 20 Carrefour stores in Shanghai have barely increased over the past 12 years, the Labor Daily, a newspaper affiliated to the Shanghai Federation of Trade Unions, quoted a human resources manager in Carrefour as saying.

Carrefour offered workers a considerable monthly wage of 1,075 yuan ($163) when it first opened in Shanghai in 1998, slightly above the city's average wage of 1,005 yuan ($153). But now its workers' wages are around 1,120 yuan ($170) on average, which is close to the city's minimum wage level. The retail giant has also declined to accept a collective wage negotiation mechanism since 2008.

Relatively low wages means that the staff-loss rate has become high. "Many people worked for only a few months and then left," said Qin. "So the store keeps recruiting students as part-time cashiers to cope with the labor shortage."

The situation is similar in Carrefour's stores in other areas. A 33-year-old cashier surnamed Mao at a Carrefour store in Shenyang, Liaoning Province, says her monthly wage is just 900 yuan ($137) and has not increased for the last three years.

Despite its workers' unchanged wages, Carrefour's revenue from the Chinese market has increased. Its latest financial report reveals revenue from its stores in China amounted to 4.8 billion ($6.6 billion) in 2010, a 12.5 percent year-on-year rise.

"It's a fact that the retail industry offers low pay for low-skilled positions, but as a multinational company with social responsibility, Carrefour should share its business growth with its employees in China," said Wang Xianqing, a professor specializing in the retail industry at Guangdong University of Business Studies.

Senior management at Carrefour started closed-door talks with the Shanghai Federation of Trade Unions about collective wage negotiation on January 27, according to the Xinhua News Agency, but no details were forthcoming.

"Employees always have a high expectation for wage increases when consumer prices keep rising, but companies usually don't want their profits squeezed by increasing labor costs," Tan Yuming, a researcher with the federation, was quoted by Xinhua as saying. "So the collective wage negotiation mechanism becomes important to balance the two sides' interests."

"I heard our monthly wage might increase by 140 yuan ($21) from next month, as Shanghai is expected to raise the minimum wage again in April," said Qin. "But this slight increase won't improve my life much."

Fries with that?

Carrefour is not the only foreign company facing increasing labor costs. US fast-food giant KFC signed its first collective contract on the Chinese mainland with its employees in Shenyang in June. Their minimum monthly wage has been raised to 900 yuan ($137) from 700 yuan ($106), and workers will also have an annual pay raise of 5 percent or more.

"Local governments used to protect foreign investors' interests too much and ignore the local labor force's benefits," said Wang. "But now things have gradually changed as the labor shortage problem is highlighted in China."

Many provinces and municipalities have raised their minimum wages. Beijing raised its minimum wage by 21 percent this month. Shanghai will also raise its minimum wage by at least 10 percent from April 1, according to the city's mayor, Han Zheng.Local federations of trade unions are also pushing multinational companies to set up trade unions in China.

Zhang Hong, vice president of Aon Hewitt Greater China, a human capital consulting firm, said that multinational clients always complain to him about the country's increasing labor costs. "Actually not only employees' pay but also the labor management costs are rising," he said.

Figures from Aon Hewitt show that salaries at multinational companies increased by 8.4 percent in China last year, and are expected to increase by 9.1 percent this year. But the rising labor costs have not hindered foreign companies' expansion in China. Foreign retailers, including Wal-Mart and Tesco, are moving into lower-tier cities by launching more stores.

"Cheap labor is not the most important advantage in attracting foreign investment," Zhang said. "Multinational companies are putting more emphasis on China's market potential."

Multinationals losing appeal

Multinational companies used to offer the prospect of decent salaries, career opportunities and a comfortable working environment. But now their appeal has faded somewhat, owing to the rapid growth of domestic companies.

The number of job seekers who consider Chinese private companies as their first-choice employer has risen by 5 percent, while the percentage of job seekers considering foreign companies as their first choice fell by 10 percent between 2006 and 2010, said a report released by Manpower Inc, a workforce solutions company, in October.

Job seekers, especially at the management level, prefer Chinese private companies, mainly because of better long-term career development opportunities and better compensation, the report says.

"Generally speaking, multinationals' employee salaries are still 30 percent higher than their elite domestic counterparts," said Zhang. "But leading private enterprises are catching up fast in salary and some have even surpassed their foreign competitors."