Beijing Announces New Minimum Wage, Not Enough to Cover Living Costs

December 1, 2020 Updated: December 1, 2020

The city of Beijing recently announced a new minimum wage rate, but the figure is not enough to cover basic living costs.

Authorities also said in its announcement that the rate was not mandatory, but only a guideline.

The Beijing Human Resources and Social Security Bureau announced on Nov. 23 that the annual minimum wage in the city would be updated to 26,400 yuan (about $4,000), which is equal to about 2,200 yuan ($334) per month before deductions for pensions, insurance, and other fees.

The bureau added that “the minimum wage is only a theoretical minimum. In actual application, companies don’t need to follow this limit—except for in extreme cases.”

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A woman and a girl posing for a portrait at an artist stall on a street in the 798 art district in Beijing, China on Oct. 18, 2020. (NICOLAS ASFOURI/AFP via Getty Images)

Each Chinese city has its own tax and fee standards. In Beijing, a resident doesn’t need to pay income tax if his monthly income is lower than 5,000 yuan ($758.5).

According to different online Chinese income calculation tools, a Beijing employee on a 2,200-yuan monthly salary can receive about 1,650 yuan ($250) per month after deductions.

In major Chinese cities, the cost of living is relatively high.

The newly recommended minimum wage isn’t enough to rent an apartment in Beijing. According to the latest market data, the average monthly rental fee for the past 30 days was 7,678 yuan ($1,168), with an average apartment size of 934 square feet.

A monthly salary of 1,650 yuan can pay for renting an apartment about 200 square feet. Many Beijing residents opt for renting a small room instead. In recent years, media reports have highlighted scenarios where more than ten people live in the same three-bedroom apartment—a potential fire hazard.

Buying property would be out of reach with the minimum wage. The average second-hand property in Beijing cost about 62,200 yuan per square meter ($877 per square feet), while a newly-built house cost 57,200 yuan per square meter ($806 per square feet), according to the latest data on China’s real estate market prices.

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Baby formula is pictured on shelves at a supermarket in Beijing on August 7, 2013. (Wang Zhao/AFP via Getty Images)

The minimum wage is also insufficient for the city’s high food prices.

At the Beijing wholesale market Xinfadi, the cheapest pork product was 16.5 yuan per 500 grams (about $2.27 per pound), according to its website. Pork is the most popular choice for protein in China.

Meanwhile, a Big Mac at McDonald’s cost 23 yuan (about $3.49).