How is the situation in the Yangtze River Delta hardware company

Since May 1st of this year, Guangdong Province has adjusted the minimum wage standard for employees in the enterprise, which has lifted the most severe “rising salary increase” for companies in the Pearl River Delta region for nearly 30 years. It is understood that due to the impact of this "increased wages," 70% of companies have received passive pay raises, and 30% of companies have chosen to take the initiative to raise wages. And how does the salary increase in the Yangtze River Delta region correspond to the Pearl River Delta? The author recently conducted a survey of some of the hardware manufacturing enterprises in Zhejiang Province in the Yangtze River Delta region.

Zhejiang Province part of the hardware company salary increase

Located in Yongkang, Zhejiang Hongtuo Industrial Co., Ltd. is a company specializing in the production of security doors. According to Li Yemin, general manager of the company, “Hongtuo” has raised salary for employees at the beginning of this year, and ordinary employees now have an average monthly salary of between 2,000 yuan and 3,000 yuan. According to his prediction, due to the “improvement of living standards, food and housing have all gone up,” this salary increase may continue.

Fang Zhengping, chairman of Hangzhou Jiahe Intelligent Control Co., Ltd., said: The change in labor costs has a greater impact on the company. In the past two years, some “home and smart” employees from the western region want to return home to work. Their reason is that in Hangzhou. Can't afford to buy a room. However, Home and Smart recently recruited several employees from Shanghai. These employees originally had a good position in Shanghai and were well paid. They have already settled in Shanghai, but they still volunteered to work in Hangzhou because the cost of living in Hangzhou is still lower than in Shanghai.

According to Li Huiping, general manager of Zhejiang Jiuhong Color Printing and Packaging Co., Ltd. of Yongkang City, from the beginning of the year to the present, the company has added 3 pays to employees, adding about 200 yuan each time. Nowadays, ordinary employees have a monthly salary of 3000 yuan. The technical staff of the tube machines can get a maximum of 18,000 yuan per month. According to Li’s own estimate, “The wages of the workers may still increase.”

Hardware companies respond to the pressure of salary increase

In the face of salary increase pressure, Li Yemin, general manager of Zhejiang Hongtuo Industrial Co., Ltd., prescribes: Adjust the product structure. From this year onwards, "Hongtuo" has gradually increased its efforts in producing high-grade armored doors. Ordinary security doors can only be sold for four or five hundred yuan; and slightly better armored doors can sell five or six thousand yuan. Li Yemin said: "Our current profit rate is about 10%. If you mainly attack high-grade armored doors, you can reach at least 30%."

The prescription prescribed by Yongkang Zhejiang Jiuhong Color Printing and Packaging Co., Ltd. is: Adopting new equipment. Previously, the "Nine Reds" could only be printed in small packages with a width of 69 cm and only had two colors. There are many hardware companies in Yongkang where there is a lot of packaging boxes with a width of 165 cm and five colors, but this requires advanced equipment. "Nine Reds" did not come before, but had to watch a large number of orders flow out to Shanghai and other places; since the investment of 48 million yuan, the purchase of two German manroland printing presses, the use of new equipment, only Yongkang local orders have been Let the "Nine Reds" be busy. As a result, "Nine Reds" began to "take merits." According to Li Huiping, general manager of the company, said: "In the past, we had an annual output value of up to 50 million yuan; after the new equipment is put into operation, this year's output value will reach 150 million yuan. With good returns, the wages of workers will certainly rise."

Expert opinion 1: The salary increase will continue

For many experts, rising labor costs is not a regional issue but a national problem. Not only in Zhejiang and Guangdong but also in “difficulty in recruiting workers”, even in the central region, “recruitment difficulties” have emerged.

Jin Xuejun, executive president of the Zhejiang Provincial Institute of Public Policy, believes that the wave of salary increase will continue in the second half, next year, and next year. This will always be a hot issue in the society. The entire industry has entered the “pay cycle” and cannot be treated as a short-term issue. It should be viewed as a trend issue.

According to Wang Meifu, Director of the Comprehensive Division of the Statistics Bureau of Zhejiang Province, China’s economy has developed to a certain stage, and salary increase has naturally become a central issue. This is also the way that developed countries have walked. In the past 10 years, the share of China’s laborers’ compensation in GDP has continued to decline.

Zhuo Yongliang, director of the Zhejiang Provincial Institute of Development and Reform, has listed such comparative data: From 2000 to 2008, the annual profit growth rate of industries above designated size in the country was about 35%; while the per capita income of urban residents grew at an annual rate over the same period. Speed ​​is only a little over 11%. This shows that the relative increase in wages is relatively low. The year 2009 is a watershed for per capita income of urban and rural residents in China. The first per capita income growth has been higher than GDP per capita since the reform and opening up. Zhuo Yongliang judged that this situation may continue.

Experts' Viewpoint 2: Salary Increases Domestic Demand

Zhuo Yongliang, director of Zhejiang Provincial Institute of Development and Reform, believes that from the macro level, the increase in salary has a great impact on China’s employment. It also means that the fundamental competitiveness of Chinese enterprises’ competitiveness and China’s economic development has undergone major adjustments. . In the long run, it will “bring a downward trend in the overall economic growth rate in China”. However, there is also a positive side to the increase. It is believed that the increase in salary can increase people’s income and help boost domestic demand.

At present, the increase in salary mainly occurs in the manufacturing sector. The labor costs of manufacturing enterprises are relatively low, but the labor costs of service industries are high. After the general salary increase in the manufacturing industry, if it is conducted to the service industry, inflation pressure will increase.

The effect of salary increases for different industries varies greatly. For example, in a monopolistic industry, the salary increase cost can be fully absorbed by the price increase. Some hard-to-price industries may choose to transfer to the Mainland. However, many industries along the coast are difficult to shift because their products are mainly export-oriented. Despite the lower labor costs in the Mainland, it is actually not worthwhile to transfer products from the Mainland to coastal exports after moving to the Mainland.

In view of the above situation, the author believes that in the face of wage increase pressure, there are many measures taken by hardware manufacturing companies, for example, or can adjust the product structure, or can increase labor productivity, or make the employment system more targeted, etc. Different types, choose different countermeasures. In general, entrepreneurs should open their minds and should not stick to a fixed model.