Chinese Workers Might Not Be Too Happy With Their Pay RaisesBloomberg News
Official and private gauges both signal hiring remains healthy
Wage increases for blue-collar and white-collar workers easing
China’s labor market remained tight in the first quarter as the economy roared back. Workers, however, are finding that pay hikes aren’t as generous as they used to be.
A slew of official and private indicators from recruitment fairs and websites show employment solid as factories stopped cutting payrolls amid surging industrial output. But services firms and new industries are no longer aggressively hiring, and wage gains for high-skilled professionals as well as less-trained migrant workers are moderating.
China’s job market is increasingly intertwined with consumption, which has been bolstered by rising incomes: Private and government buying accounted for 77.2 percent of the first-quarter expansion. Policy makers have prioritized creating greater employment as they move to cut excess output in mines and factories that would inevitably lead to layoffs.
Officials can be reassured, at least for now. The surveyed jobless rate fell below 5 percent in March, according to the National Bureau of Statistics. China created 3.34 million jobs in the first quarter, well on pace to exceed the government’s 11 million target for this year.
The shrinking working-age population after decades of one-child birth restriction is one reason for the tightness in labor markets. "The aging problem is getting worse and the labor supply is declining," Social Security Fund Chairman Lou Jiwei said Friday at a forum in Beijing. The labor supply can expand as more rural dwellers enter the workforce and people retire later, said Lou, a former finance minister.
While slower wage gains help restore competitiveness, that could curb household spending and hinder the transition of the economy from old industries to services and consumption.
Here are seven charts that show how the labor market is faring:
There were 1.13 vacancies per applicant at job centers in 105 cities across the nation last quarter, Ministry of Human Resources and Social Securities data show. That’s unchanged from the previous quarter.
A similar gauge by Beijing-based Zhaopin Ltd. and the China Institute for Employment Research at Renmin University fell to 1.91 in the first quarter from 2.41 at the end of 2016. The indicator incorporates data from Zhaopin.com, one of China’s major recruitment sites.
Professionals often switch jobs after the week-long Lunar New Year holiday, which this year fell in January and February, and some graduates look for work during the spring semester. That led to the decline in the ratio, according to a report by the providers.
Internet and e-commerce talent was the most sought after, with 9.21 jobs for each applicant. Hiring also is strong in transportation and financial services, while mining and energy companies are the most reluctant to hang out the help wanted sign.
“There is a clear polarization among different sectors in the momentum of hiring,” Zhaopin and CIER said in their report. “Traditional sectors are facing challenges from both the anti-globalization waves from abroad as well as slow upgrading of their own facilities.”
Factories stopped reducing employment last month for the first time since 2012, data from NBS show. A private factory gauge also signaled better hiring prospects in the first quarter, although the level stayed below 50, the line between employment growth and contraction.
The employment picture is mixed. While the official gauge of non-manufacturing businesses showed that companies are cutting staff, a private indicator from Caixin Media and Markit Economics highlights a steady expansion of jobs at those companies. The official services employment index was at 48.8 in March, while the construction industry reading edged down to 50.8, according to an NBS statement.
New economy firms -- spanning law firms, software companies and pharmaceutical labs -- are hiring less aggressively. A labor input sub-gauge of New Economy Index fell in March from a year earlier.
Workers flowed back to traditional sectors, said Chen Qin, chief economist at Chengdu-based data miner Business Big Data, which compiles the gauge by scraping web sources for job ads and venture capital investment announcements. "When the economy is in a downturn, new sectors sustain it, but in an upswing, traditional businesses expand fastest," he said.
While China pledges ensure employment, the government is no longer enthusiastic about rapid wage gains as Southeast Asian nations offer cheaper manufacturing bases. Paychecks for migrant workers rose 6.4 percent from a year earlier as of end-February, according to NBS, down from more than 20 percent in 2011. Shanghai approved a 5 percent increase in minimum wages effective this month, the smallest in eight years.
Private gauges of higher-end professionals also show slower pay hikes. Average monthly salary for new economy workers stood at 8,958 yuan ($1,300), little changed from a year earlier, according to BBD. Salary for white-collar workers edged up 0.8 percent in the first quarter from the previous one, Zhaopin data show.
Professional services -- such as finance, accounting or law -- and consulting were the highest paying sectors with average monthly salary of 9,947 yuan, followed by firms in funds, securities, and investment at 9,467 yuan.
— With assistance by Xiaoqing Pi