Shanghai Raises Minimum Wage 13% as China Seeks to Boost Consumer Demand – Bloomberg

China’s financial hub of Shanghai joined Beijing and Shenzhen in boosting the minimum wage this year as policy makers seek to spur consumer spending and a shrinking labor surplus pushes up salaries.

The nation’s most affluent city will increase the wage by 13 percent to 1,450 yuan ($230) a month starting in April, the Shanghai human resources and social security bureau said in a statement on its website today. It’s the 19th adjustment since the city’s minimum wage rule was established in 1993, according to the statement.

Policy makers in the world’s second-biggest economy are trying both to keep inflation in check and shift the nation’s economic growth toward domestic demand. Promoting consumption by raising wages would facilitate such a transition, said Tim Condon, chief Asia economist at ING Financial Markets in Singapore.

Increased company profits over the past decade “means producers have the wherewithal to increase salaries,” Condon said.

In 2011, 24 provinces and municipalities raised minimum wages by an average of 22 percent, according to the Ministry of Human Resources and Social Security. Shanghai’s rose by 14 percent.

China plans to raise the level by an average of at least 13 percent annually from 2011 to 2015, according to the national 12th Five-Year Plan that covers those years. The government suspended increases in minimum wages in 2009 to help companies weather the global financial turmoil. Thirty provinces raised minimum wages in 2010 by an average of 22 percent…

via Shanghai Raises Minimum Wage 13% as China Seeks to Boost Consumer Demand – Bloomberg.