Charts of the Day: Wage Gap Widens Between Urban Workers Inside and Outside the Private Sector

The average annual wage of urban employees outside the private sector outpaced that of their private-sector counterparts in 2018, even as wage growth accelerated for both groups, official data showed.

Compared with workers outside the private sector, private sector employees earned lower wages and benefited from slower wage growth last year.

The average annual wage of urban employees outside the private sector (link in Chinese) reached nearly 82,500 yuan ($12,000) in 2018, up 11%, which was the highest annual growth rate since 2012, according to data from the National Bureau of Statistics (NBS). As for the urban private sector workforce (link in Chinese), the average annual wage reached nearly 49,600 yuan last year, an 8.3% increase.

According to the NBS, employers outside the private sector — or the “nonprivate sector” — consist of state-owned enterprises, collective enterprises and companies with overseas investments. The NBS collected figures from nearly 1.68 million such companies and institutions for data on 173 million employees. It also collected data from 740,000 private companies, which accounted for about 7% of all firms in the private sector.

Since 2014, wages have grown at a faster pace for employees outside the private sector, resulting in a continuously growing wage gap between the two groups.

In regional terms, companies and institutions outside the private sector in eastern, central, western and northeastern China all posted higher average wage growth rates than those of private companies in 2018, with the gap between the two sectors in the eastern region being the smallest — 0.8 percentage points.

The nonprivate sector in Central China had the highest average annual wage growth rate of 12.7%, while the region’s private sector had 8.8% growth. In western China, the gap between the two growth rates widened to 4.6 percentage points, while that of Northeast China was 3 percentage points.

Contact reporter Timmy Shen (hongmingshen@caixin.com)