In July, the minimum wage in central Shenzhen will rise by 17.6 percent from its current level of 850 yuan to 1,000 yuan, with the minimum wage in suburban areas of the Special Economic Zone increasing by 20 percent from 750 yuan to 900 yuan.

Inflation nationally has been consistently above eight percent this year, reaching 8.5 percent in April, with food prices in April increasing by 22.1 percent year on year. Given that food and basic necessities form the bulk of the expenditure of those on the minimum wage, next month’s increase will be barely enough to cover inflation.

Even at 1,000 yuan a month, employees will have to work long periods of overtime just to earn a living wage in Shenzhen, where inflation is significantly higher than the national average. For factory workers in Shenzhen and across China, the minimum wage has become the basic wage. Employers routinely refuse to pay anything above the minimum wage and often make payment of even the minimum wage contingent on employees’ fulfillment of stringent conditions, for example, not taking any day’s off work, even sick leave.

If workers are to be guaranteed a living wage, they need the right to engage in free collective bargaining with their employers. Only through collective action, led ideally by competent trade union representatives, can workers ensure they are fairly and adequately compensated for their labour, not merely fobbed off with the legal minimum wage.

Encouragingly, the Shenzhen government is reportedly considering the introduction of collective bargaining legislation this year and the municipal federation of trade unions has demonstrated an active interest in boosting collective bargaining in Shenzhen by co-hosting a conference on the issue last December.

As CLB director Han Dongfang has pointed out, “by developing collective bargaining at the grassroots level, enterprise-level unions will be transformed into labour organizations that genuinely represent the rights and interests of workers and once again become a functioning part of the ACFTU. In short, a collective bargaining system can fundamentally protect workers’ rights and provide the ACFTU with an excellent opportunity to rebuild itself as a genuinely representative trade union.”