Nearly a third of Chinese office workers reported falling salaries last year, the highest share in at least six years, underscoring persistent deflationary pressures in the world’s second-largest economy.
About 32% of white-collar workers in China surveyed by the online recruitment platform Zhaopin Ltd said their wages dropped last year.
That’s the largest proportion going back to at least 2018, according to data compiled by Bloomberg.
The survey published this month suggests that more Chinese employers are holding back from increasing wages, a dynamic that can prolong deflation.
While deflation can boost individuals’ purchasing power, it’s widely seen as a threat to the economy as a whole.
Consumer prices by the end of December fell for a third consecutive month, the longest streak of declines since 2009.
A wide measure of prices called the gross domestic product deflator fell for the last three quarters of 2023, according to Bloomberg calculations based on official data — the lengthiest stretch since the late 1990s.
About 19% of workers said their salaries were stable in 2023, according to the Zhaopin survey. Just over 44% reported an increase — the highest number since 2019, though well below the share pre-pandemic.
The widening divergence suggests the labour market is increasing inequality.
“In an economic environment of intense competition, changes in white-collar salaries show a prominent ‘Matthew Effect’,” according to the Zhaopin report, referring to a pattern in which those who begin with advantage accumulate more advantage overtime, while those who begin with a disadvantage become more disadvantaged.
Economists often look at alternative employment and wage data for China, since official labour market data in the country is less detailed than for other major economies.
Average urban wages in China increased nearly 6% in nominal terms last year, according to official statistics. That data covers workers in manual and white-collar jobs.
The China Institute for Employment Research’s CIER index — which measures the overall strength of the labour market — declined in the fourth quarter compared to the previous year, the institute said on its website.
The institute hasn’t released a precise numerical index since 2022.
Average salaries offered by companies to new hires in major Chinese cities fell 1.3% year-on-year in the last quarter of 2023, according to a separate survey from Zhaopin released earlier this month.
That was the largest drop since at least 2016. – Bloomberg
