Two strikes in four days by thousands of Guangzhou factory workers demanding higher pay have renewed the pressure on the provincial government to increase the minimum wage.

The Guangdong government was expected to increase its statutory minimum wage earlier in the year after Shenzhen raised its rate to 1,500 yuan per month in February. But, apparently under pressure from the Hong Kong business lobby, the government announced that the minimum wage would only be increased later at “the appropriate time.”

That time may be approaching. Guangdong has witnessed numerous strikes this year over factory closures and relocation plans etc. but in the last month [2] or so wage demands have once again come to the fore.  On the morning of 18 June, the entire 3,000 strong workforce at the Citizen factory in Guangzhou reportedly went on strike [3] demanding a pay increase. Their basic wage was just 1,100 yuan a month, the statutory minimum in Huadu district [4] where the factory is located. After a 200 yuan deduction for social security, workers complained that they simply did not have enough to live on.

Even workers on a higher rate are now striking for better pay. Workers at another Japanese-owned electronics factory in Guangzhou were offered a pay increase from 1,350 yuan to 1,500 yuan a month on 1 June, but around 1,000 employees still went out on strike [5] on 14 June demanding higher pay. The workers said rapidly increasing consumer prices had already eroded much of the offered pay rise. Workers and management held formal talks to resolve the issue on 18 June.

Although the headline rate of inflation in China has eased over the last year [6], down to three percent in May compared with 6.5 percent in July, poorly paid workers in major cities such as Guangzhou are still finding it difficult to earn a living wage. And many factories in southern China are now struggling [7] to hire new workers because the wages offered are simply too low to be worthwhile.

Media reports [8] early in 2012 suggested that Guangzhou’s minimum wage would be increased by around 13 percent this year from the current level of 1,300 yuan a month (in the central districts) to 1,470 yuan, and looking at recent national wage trends that figure still seems likely when the adjustment finally goes into effect.

Wage guidelines issued by ten provinces [9] across China today show that the average wage increase in enterprises would be around 14 percent this year, with the upper range around 20 percent and the lowest increase around five percent.

Major cities like Beijing and Shanghai forecast slightly lower average rates of increase, 11.5 percent and 12 percent respectively, reflecting the comparatively higher existing wage levels in those urban centres.