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By Hugh Cameron
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China's minimum wage has undergone a drastic rise over the past few years, while American workers continue to wait for an increase.
According to Trading Economics, citing the country's Ministry of Human Resources and Social Security, China's minimum monthly wage stood at 960 yuan renminbi in 2009, equating to roughly $131 that year. Over the next 12 years, this rose nearly 170 percent to 2,590 yuan in 2024, or around $353, where it remains unchanged today.
In the meantime, and despite calls for change, the federal minimum wage in the U.S. has been stuck at $7.25 an hour since 2009, when it was increased from $5.15 under the Fair Minimum Wage Act.
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Why It Matters
The Bureau of Labor Statistics estimated in 2022 that roughly one million workers are on the minimum wage in the U.S., equal to 1.3 percent of all hourly paid workers, and any increases to this base salary remain a subject of constant debate.
Those in favor—including prominent figures such as Bernie Sanders, who has introduced several bills seeking a minimum of $15—contend that wages should increase in tandem with inflation and the accompanying rise in the cost of living. Sanders has more recently called for a $17 minimum wage, arguing that this would also provide an "economic stimulant" by "putting money into the hands of people who will spend it on basic needs."
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Opponents, meanwhile, have argued that raising the minimum wage would burden local businesses, particularly small ones, forcing them to reduce their employees, cut hours and automate jobs to offset the higher labor costs.
Many of those surviving on the minimum wage are employed in service occupations—three out of four workers in 2022, according to the Bureau of Labor Statistics—and they are therefore likely to have their hourly wages supplemented with tips from customers.
What to Know
China's minimum wage varies from province to province, ranging from 2,690 yuan per month in the affluent city of Shanghai to 1,880 yuan in the largely underdeveloped province of Qinhai, according to China Briefing.
In the U.S., similarly, the federal minimum wage does not preclude states themselves from enacting laws to give hourly workers higher compensation.
"30 states and a larger number of localities have raised their minimum wages since 2009," Michael Reich, professor of economics and chair of UC Berkeley's Center on Wage and Employment Dynamics at the Institute for Research on Labor and Employment, told Newsweek.
Minimum wages in California, New Jersey, New York, Denver, Seattle and many more have more than doubled since 2009, areas which Reich points out "comprise about 60 percent of the U.S. population."
These local increases have prevailed in the face of Republican bulwarks at the federal level, according to David E. Card, professor of economics at the University of California, Berkeley, a long-time scholar of the U.S. minimum wage.
According to Card: "A huge body of work generally finds that increases in the [minimum] wage raise earnings of lower paid workers," and that while others show "show small drops in employment at lower wage employers," these are "usually counteracted by gains in jobs at higher paying firms."
What People Are Saying
President-elect Donald Trump, speaking to NBC's Meet the Press in early December, said that he would "consider" raising the federal minimum wage once in office, after consulting with state governors.
"[$7.25] is a very low number. I will agree, it's a very low number," Trump told NBC's Kristen Welker. "Let me give you the down side, though. In California they raised it up to a very high number. And your restaurants are going out of business all over the place. The population is shrinking. It's had a very negative impact. But there is a level at which you could do it, absolutely."
Trump also noted that the variation in cost of living across the U.S. would complicate a national increase in the minimum wage.
"Mississippi and Alabama and great places are very different than New York or California, I mean in terms of the cost of living and other things," he said. "So it would be nice to have just a minimum wage for the whole country, but it wouldn't work because you have places where it's very inexpensive to live, where a minimum wage which is at $8 or $9 might be, you know, might have very little effect because the cost of living in certain places is really low."
David E. Card told Newsweek that economists who four decades ago had opposed the whole concept of a minimum wage, most have adopted a "more favorable position" on the issue "in light of accumulated evidence from scores of studies."
"But you can still find some vociferous critics, many of whom have been saying the same things for 40+ years," he added.
Michael Reich said that China's minimum wage raises presumably had a "substantial effect on labor costs in its export industries." However, he told Newsweek that this was likely countered by the increase in Chinese productivity over the past few decades, meaning that "higher minimum wages do not necessarily translate into reduced competitiveness."
What Happens Next?
In 2025, many states have already implemented new minimum wage increases, ranging from $0.25 in Montana to $2.15 in Michigan, with more set to occur over the course of the year. Once these changes take effect, the average state minimum wage is set to grow from $10.69 in 2024 to $11.18.
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