By intern reporter Li Peng

From Caijing Online

The Ministry of Human Resources and Social Security (MHRSS) announced November 17 that a planned adjustment of the national minimum wage would be postponed in view of the current economic conditions.

MHRSS not only postponed the adjustment, it also advised some regions that they could reduce their required insurance payments if they already had positive balance.

This announcement signals a rapid shift in the government’s wage policy. It was less than two months ago on October 27 that a spokesman for MHRSS said that the ministry would increase the minimum wage. Territories that had not recently increased their minimum wage were told they would have to by the end of the year.

President of the wage department for the China Commission for Labor Studies Su Hainan said that the minimum wage is set according to the factors like the minimum living expense, the consumer price index (CPI), payment rates for social insurance, and a region’s average wage. With the economy slowing and CPI in decline, some areas have a greater need for employment. Postponing the adjustment of the minimum wage was necessary based on these factors, he said.

In order to cope with the bleak state of the current market, many companies will have to lower salaries. Without that ability, they could go under, said Su.

When asked whether the sudden postponement of an increase to the minimum wage was in line with current regulations, Su pointed out that it was just a postponement, so it did not go against related bylaws. He also said that this postponement would not influence most employees since many regions had already increased their minimum wage to an adequate level.