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The incomes of workers in China's monopoly sectors like the telecoms, finance and tobacco industries are now three times the national average while non-wage benefits given to workers in these sectors increased the gap with the national average by a much as 10 times.

 

"Income is now deviating away from the actual contribution made by staff in the monopoly sectors," said Bu Zhengfa, vice minister of Labor and Social Security at a recent forum on salary management.

 

Bu cited an example of a worker in a civic electric power company. His monthly salary approached 6,000 yuan (approx. US$750) but his annual income could be as much as 150,000 yuan (US$18,750) with bonuses, allowances and housing benefits. This led to a salary 10 times the national average.

 

The high salaries paid to employees in these industries -- in the main they are state-owned -- had become the most significant problem of China's income distribution system, Bu acknowledged.

 

Interviews by People's Daily at two leading universities in Shanghai showed that many of their graduates were eager to work in the tobacco, telecom and petroleum sectors no matter what positions they might be offered.

 

"With a guaranteed high salary and job security I feel confident about these monopoly sectors," a university graduate surnamed Wang is quoted as saying and who’d just signed a contract of employment with a telecoms firm. Initially Wang expects to earn 4,000 yuan (about US$500) a month.   

 

"Lack of strict regulations constitutes the major cause for monopoly firms to enjoy excess profits," said Prof. Wang Zeke, with elite Zhongshan (Dr. Sun Yates-sen) University in Guangzhou. He suggested the government step up the pace to do away with monopolies and take measures to restrict their profits.  

 

In China the government stopped levying profits from state-owned firms in 1992 to encourage their development. With preferential policies and their right to use state-owned assets most increased their monopoly status in their respective sectors and have enjoyed ever higher profits as a result.  

 

The central government has started to take measures to control salaries in these monopolies. Some telecom and financial companies have even been urged to keep a tight reign on the salaries of their employees.

 

Su Hainan, director of the salary research department with Labor and Social Security Ministry, said relevant ministries are considering collecting more taxes from state-owned firms which hold large state-owned assets.

 

(Xinhua News Agency June 6, 2006)