China has often marketed itself to the rest of the world as a place where big companies can find some of the cheapest labor available, and as such, it has seen itself become a hub for manufacturing, often of high end products for relatively low returns, with employees receiving even lower wages.

However, this week the government in China has placed importance on increasing the minimum wage in the country, in a bid to improve the quality of life for workers.

This announcement came alongside the pledge from the government in China on Wednesday (February 8th) to boost the number of jobs available to people in the Far Eastern country by 45 million in the next three years, with wages expected to be scaled up by as much as 13 per cent over the same period to 2015.

While this will mean that the cost of labor will rise for Chinese employers, and the outsourcing of manufacturing for companies elsewhere in the world will become more expensive, it can only be to the benefit of both Chinese employees and employers in the long run.

It was recently reported by the Financial Times that many factories in China face an 'employee lottery' every time a holiday comes along, as workers who have moved  from elsewhere in the country to find jobs return home to visit families, and often decide it is not worth their time to come back.

This is where the rising wages could benefit companies in China. As people are paid gradually more and more over time, the benefits to remaining in work will become more apparent to them.
So, as well as improving the quality of life for the average person in the country, these reforms will also help companies with staff retention, allowing them to build a more  dedicated and skilled workforce, which can mean they will be able to offer better training to staff, and better services and productivity to their consumers.

In turn, this will allow companies to increase their income through providing a better quality of work and end product as a result.

Posted by Lee Thrace

Photo Credit: Liquid Library