MOHRSS Implements National Income Doubling Plan: National Income Can Double in 5 Years
Specific measures concerning residents' income, such as raising the individual income tax threshold and raising the minimum wage, often become hot topics of media attention.
Recently, regarding issues such as the necessity, urgency, resistance to, and direction of income distribution reform, our newspaper conducted an exclusive interview with Su Hainan, Director of the Labor Wage Research Institute of the Ministry of Human Resources and Social Security and President of the Compensation Professional Committee of the China Association for Labor Studies. Su Hainan revealed that the income distribution reform plan should come out within the year.
Facing Up to the Widening Wealth Gap
Q: Some reports say the income distribution plan is still in the research and drafting stage. Can you tell everyone when the income distribution plan will be introduced? If income distribution reform continues to be delayed, what consequences will there be?
Su Hainan: The income distribution plan should be introduced within this year, because the central government proposed the relevant guidelines several years ago, and the real problems are already very serious. At present, unreasonable income distribution and the widening wealth gap are recognized and indisputable facts. If this problem is not solved, it may lead to some serious social problems.
Many problems in the field of income distribution have already caused dissatisfaction among ordinary people. Judging from the current situation, the income gap between urban and rural residents remains at about 3.3 times, and the gap between industries has reached as high as 15 times; the per capita income gap between the top 10% highest-income households and the bottom 10% lowest-income households is more than 20 times, the annual salary level of executives in a small number of financial state-owned enterprises is more than 100 times the social average wage, and the astronomical pay of executives in individual enterprises is more than 2,000 times the social average wage.
In addition, some enterprises are in arrears with or deduct workers' wages, and the phenomenon of unequal pay for equal work is widespread. Some monopoly enterprises enjoy high-level allowances, subsidies, and welfare benefits, creating an unreasonable gap with ordinary employers. Moreover, the secondary distribution system is also imperfect. For example, the amount used for livelihood construction, especially social security, is not large enough, the funds transferred to rural and poor areas are not enough, and the distribution ratio has not been fully institutionalized. These problems must be solved more quickly.
Q: What do you think are the root causes of the current unreasonable income distribution and the widening wealth gap?
Su Hainan: There are mainly three reasons. First, the constraints and effects caused by unreasonable aspects of the economic development mode and economic structure. The unreasonable economic development mode and economic structure have amplified the income gap formed by objective conditions such as unbalanced productivity and natural resources, becoming the main root cause of unreasonable income gaps. Second, the influence and constraints of defects in the economic and social system. The defects in the economic and social system have further worsened the prominent problems in income distribution, expanded unfair income distribution gaps, and become the deep-seated root cause of unfair income distribution. Third, the constraints and effects of an unsound income distribution system. The income distribution system involves the primary, secondary, and tertiary distribution fields, and to this day the system still has many defects. An unsound income distribution system is the direct cause of unfair income distribution.
SOE Profit Turnover Must Be Reasonable
Q: You have said that "a small number of people, a small number of units, departments, or industries have obtained unfair and unreasonable benefits through non-labor factors such as resource monopoly, administrative power, market exclusivity, and special status, and these have become resistance to deepening reform of the income distribution system." Please analyze the specific mechanism by which this resistance to reform is formed.
Su Hainan: Some industries related to the national economy and people's livelihood need state-owned monopoly operations, which is understandable; it is also acceptable that in some competitive fields state-owned enterprises have not yet withdrawn; and it is unavoidable that state-owned enterprises generally receive government attention. But if state-owned enterprises do not accordingly establish a reasonable profit turnover system and regard the gains obtained from occupying national resources and so on as belonging to their own units, this is clearly wrong and also unfair.
If the profits obtained through non-labor factors such as administrative power, resource monopoly, market exclusivity, and special status are not removed, but instead become a source of income for personnel of state-owned enterprises, this is obviously unfair and unreasonable. This puts forward new requirements for the relevant competent departments: they must act from a fair-minded standpoint, participate in the formulation of relevant macroeconomic regulation policies from the perspective of safeguarding social fairness and justice, and at the same time actively perform their duties and strengthen regulation of the unfair and unreasonable income of vested interest groups. Relevant competent departments must absolutely not obstruct the introduction of new income distribution reform policies from the standpoint of their own departments, and even less from the standpoint of the vested interest groups they supervise.
Q: What proportion of state-owned enterprise profits should appropriately be turned over? How can it be ensured that the profits turned over are used for people's livelihood needs?
Su Hainan: At present, 5% to 10% of profits are turned over. First, I think this proportion is definitely too low and should be raised; second, after raising the proportion, the turned-over profits and the income from the transfer of state-owned enterprise property rights should both be clearly included mainly in the social security fund or other transfer payment accounts used for people's livelihood. Moreover, every sum of turned-over profits and the whole sequence of its use must have clear records, and it must be possible for people's congress deputies to understand them, so as to better perform their supervisory function and ensure that this money is mainly used for people's livelihood construction.
Implementing a "National Income Doubling Plan"
Q: Some people have proposed that China should also carry out a "National Income Doubling Plan." What is your view on this?
Su Hainan: We can learn from this. After all, Japan did it back then, and the effect was quite good. China should now be said to basically have such conditions, so in the "12th Five-Year Plan" or the government's work plan, similar practices should be considered as appropriate or adopted. If the average annual wage growth is above 15%, it can double in about five years. Therefore, after calculation, we might as well also propose such a target. But it must be made clear that this is a macro overall plan. In specific implementation, it does not mean everyone's income will double; we can only strive to achieve a substantial increase in the income of most people.
Q: You said we already have such conditions. Where is this specifically reflected?
Su Hainan: China's GDP growth rate is still above 8%, and most importantly, China's per capita GDP has already reached 4,000 US dollars, making it already a lower-middle-income country, and by 2020, it must achieve a moderately prosperous society in all respects. Therefore, we have the responsibility and ability to let ordinary people's incomes grow faster. In recent years, on the whole, the growth of residents' income and labor income has been relatively low, lower than the growth level of GDP and average labor productivity. The accumulation of these factors, plus the fact that the 16th and 17th National Congresses of the Party long ago clearly stated the need to raise the two "proportions" and establish a normal wage growth mechanism for workers, and the fact that ordinary people have this ardent expectation, means that in making such a "doubling" arrangement now, whether announced externally or held internally, it should be considered and a decision should be made.