Many Chinese companies have started to reduce employees’ salaries since early August, citing the need to cope with the additional expenses brought about by the impending implementation of “mandatory social security” on September 1. Online postings from netizens in Guangdong, Guangxi, Shandong, and other regions revealed that companies have notified employees in advance of pay cuts, typically around 1,000 yuan, leading to significant decreases in wages and causing widespread discussions.
On August 19, a video from Liuzhou, Guangxi, circulated on social media platform WeChat, with a comment stating “salary reduced by 1,600 yuan,” quickly sparking debates. Some netizens commented, “It’s not just Liuzhou, it’s everywhere.” A netizen in Nanning, who works in telecom outsourcing and goes by the handle “Mo Ming De Ge,” mentioned that after deducting social insurance and housing fund, the take-home salary is only 1,700 yuan. The comment section was filled with discussions, with some exclaiming, “1,700 yuan? Even delivery drivers make more than that,” while others resignedly stated, “Considering yourself lucky with a 1,600 yuan cut, some are receiving only a few hundred.”
A netizen from rural Shandong sarcastically remarked, “Farmers earn just over a hundred yuan a month, and you still think it’s too little?” Another person lamented, “You have a 1,600 yuan salary, while others have lost their jobs altogether.” There were also comments like, “Receiving less than 2,000 yuan and still thinking about having a second child? It’s outrageous.”
According to a previous report in the “Dezhou Evening News,” the minimum wage standards in various regions have been announced, with Shanghai being the highest at 2,690 yuan and Shandong at 2,200 yuan. However, many companies are actually paying lower wages than the standards. A netizen from Shandong, Qiu Shuzhen, commented, “We started reducing wages in June, from 3,000 to 2,100.”
Mr. Li, who operates a ceramic company in Foshan, Guangdong, told Epoch Times on September 20 that the company’s orders have sharply declined, and it could close at any time. He expressed helplessness when talking about the salary cuts, saying, “The overall environment is not good; we can hardly cope, and it’s considered good if many bosses can sustain their businesses.”
Mr. Li emphasized that he is still paying social insurance and housing funds for his employees. He said, “If anyone truly doesn’t want to work, I’ll compensate them; if they want to leave, they can. The factory next to mine closed last month.”
He also revealed the challenging situations within the industry, “Over ten lighting factories in Zhongshan have shut down, and many of my friends are struggling. Everyone is trying to find solutions, but there’s not much that can be done.” Mr. Li mentioned hearing about some company employees voluntarily agreeing to take several hundred yuan less each month, “Everyone knows, once a company goes bankrupt, it’s not good for the employees either.”
A netizen from Henan, “Fruit Tea,” commented, “We haven’t been paid for three months, and the company doesn’t allow inquiries.” A netizen from Hebei, using the pseudonym “Lost Thirty Years,” shared that their salary was cut by 800 yuan before the New Year and is now rumored to be reduced by another 1,000 yuan. In Hunan, there were reports of nurses at a local traditional Chinese medicine hospital earning only 1,800 yuan per month.
Observers noted that online complaints about salary cuts were rampant, but few directly criticized the forthcoming “mandatory social security” implementation. Some individuals on certain platforms expressed, “Nowadays, people are afraid to speak out. Farmers, sanitation workers, and factory workers used to voice out their frustrations.”
An experienced media professional, using the moniker He Guangming, who once taught at Shandong University, mentioned in an Epoch Times interview: “Many individuals were already hesitant to speak up. Now they have even less courage and can only vent online. If one openly criticizes policies, they might face consequences like account suspension or even detention. I’ve had a few accounts suspended by them.”
He added, “The public is feeling very repressed now. If they can’t endure it anymore, some might resort to extreme measures, with the underprivileged often bearing the brunt. According to U.S. government data, as of May in the 2024 fiscal year, nearly 56,000 Chinese immigrants were discovered entering the U.S. along the southern border with Mexico and the northern border with Canada, exceeding the entire 2023 fiscal year’s 52,700 individuals. This indicates that many people are completely disillusioned about the future.”
On August 1, the Supreme People’s Court of the CCP issued the “Interpretation II on the Application of Laws in Labor Dispute Cases,” explicitly stating that any agreement between units and employees to waive social security payments is invalid. If an employee resigns due to this reason, the court should support their request for economic compensation. The key point is to require all employing units to lawfully contribute to old-age, medical, unemployment, work injury, and maternity insurances, without evasion. Historically, small and medium-sized enterprises commonly underpaid or evaded such payments. With the implementation of the judicial interpretation, business costs are bound to increase.
Xiao Qiang, a retired professor from Renmin University of China, told Epoch Times, “In fact, the Supreme People’s Court’s document this time doesn’t bring anything new, it’s just a reminder: social security should have been mandatory long ago, now it’s just being more strictly enforced. People’s Daily is also clarifying there is no new mandatory policy, just enforcement.”
He added, “The suddenness felt by the public is because whereas payments could be less or skipped in the past, now all contributions are fully mandatory, causing increased pressure. The laws have long existed, but when rigorously implemented at the grassroots level, it significantly impacts both enterprises and individuals.”
However, the CCP’s implementation of “mandatory social security” has imposed a heavy burden on China’s vast micro-enterprises and many low-wage workers, with its “one-size-fits-all” approach feared to lead to unforeseen consequences.