It is necessary for the government to conduct macro-adjustments on improper wage increases, according to an article in the Workers' Daily. An excerpt follows.

According to a Xinhua report, the Beijing Bureau of Labour and Social Security issued a guideline for enterprises, suggesting a minimum monthly wage of 495 yuan (US$60) for laborers.

According to the circular, the increment of the average wage in state-owned enterprises (SOEs) and state-controlled public companies should not exceed 2,334 yuan (US$282), while the wage of workers with enterprises which hold monopolies should not increase by more than 1,627 yuan (US$196).This is aimed at curbing the worrying fact that in some monopolized SOEs, no matter a company's bottom line, wages are increasing rapidly and far exceeding national average increases.

These enterprises complain that the low government-set prices have caused losses.

Conversely, they largely elevate employees' wages.

In some non-state-owned enterprises, employees' wages have not increased for years. Some are even lower than the minimum standard.

Thus, government guidance or intervention in the wages of enterprises becomes a pressing issue.

Some hold that in a market economy, the government should not intervene in wages, but this is not true.

In China's economic transition period, the wage management system and related laws and regulations have not been completed.

In some SOEs where the interests of employees have been exceedingly amplified, wages have increased irrationally.

But in non-state-owned enterprises, the ultimate pursuit of employers' interests has led to extremely low wages for their employees.

From the perspective of either labor economics or public administration, wages have always been an important regulatory lever for social fairness.

When the "invisible hand" is not at work, necessary government intervention is an objective request to allow the completion of a market economic system.

(China Daily July 6, 2004)