Authorities in this manufacturing hub of Guangdong province are planning a hike in minimum wages to attract more workers to the Pearl River Delta (PRD) and plug a labor shortage, an official has said.

The new minimum wage in the region will be equal to or higher than special economic zone Shenzhen's adjusted minimum wage, which will be implemented on July 1, Chen Siyi, director of the wage division of the Guangdong labor and social security department, told China Daily on Friday.

In downtown Shenzhen, the minimum wage will be set at 1,000 yuan ($145) a month. It will be raised to 900 yuan a month in suburban areas.

The increases are 17.6 percent and 20 percent respectively from the previous year.

The current minimum wages in the whole of Guangdong are divided into five categories, ranging from 450 yuan to 780 yuan, according to the consumer price index of different cities.

The authorities are still studying the implementation date of the minimum wage and gathering feedback, Chen said, with detailed preparations being carried out by early next year.

"It is necessary to improve the minimum wage, especially in the PRD, so as to maintain the appeal of the industrial hub of South China for migrant workers," Chen said.

It is also an effective way to draw high-quality and skilled labor to the delta, he said.

Similarly, improving the minimum wage will help balance price inflation and guarantee a quality of life for workers, Chen said.

Huang Yaojin, a migrant worker employed by a food processing factory in the city of Dongguan, said he is very happy the minimum wage will be increased.

"Everything is much more expensive than before, including food, housing and basic necessities," Huang said.

"It will be very difficult to survive here if wages stay the same as before."

However, a number of businesspeople are worried the higher minimum wage will exacerbate the current difficulties faced by labor-intensive manufacturing industries in the PRD.

"The new labor contract law has significantly increased our costs," Liu Hanmin, a manager of Dongguan Taisheng Furniture Company, said.

"If labor costs keep rising, we will move out of Guangdong province."

(China Daily June 21, 2008)