Expert concerns over 'growing' wages need reality check

An irritating monthly routine for many Chinese employees is to open a sealed pay slip, glance at the numbers, squeeze it into a ball, or tear it into pieces — depending on your mood — and chuck it into the bin.

Many have quipped that at a time when the price of nearly everything is rising, the only thing that stays stagnant is their salaries. Popular complaints are given an outlet in vulgar jokes, such as “one cannot look at a pay slip without regretting opening it or fuming that it is useless, too thin to be even improvised as toilet paper.”

Crassness aside, the joke illustrates the widespread frustrations with wage levels in China, which many believe haven’t risen with the general economic tide. One man, however, openly questioned the prevalent public perception and earned himself a great deal of criticism.

Cai Fang, deputy head of the Chinese Academy of Social Sciences, dropped a bombshell with a statement he made during a radio talk show on October 20. “Excessively rapid growth of salaries would hurt the economy,” said the prominent economist and demographer. This remark backfired badly.

Cai was immediately cursed online for airing views that are “completely out of touch with reality.”

This, to many of his detractors, is yet another example of a discrepancy between an elite professor’s perceived inflammatory viewpoints and popular feelings, of his insensitivity to commoners’ plight, or worse, of scholars identifying with capitalists and businessmen while further estranging themselves from the masses.

Like all rebukes directed at public figures, the criticism heaped on Cai is somewhat hyperbolic, and thus not totally justified. On the face of it, his argument isn’t entirely wrong. Steep growth of salaries does have a crippling effect on the economy, by raising labor costs for businesses. This is indeed a law of economic common sense.

Out of context

But even this law cannot be taken at face value. It cannot be invoked without any regard of the differences between the country of its origin and China, where complex economic circumstances often defy Western theories and necessitate discretion. This is exactly the mistake Cai made — invoking an economic theory out of context. In a country where hundreds of millions of migrant workers — the mainstay of the labor force — are frequently owed back pay and left high and dry by runaway bosses, it’s absurd to envision a scenario of “overly rapid wage growth,” which doesn’t exist, or won’t materialize anytime soon.