Honda to Raise Regular Workers' Pay in China to $280 Per Month to Stop Strike

Honda is trying to get employees to return to work in China after nearly 2,000 factory workers -including about 600 interns- staged a walkout at all four of its Chinese plants more than two weeks ago.

The workers have been demanding an increase of over 50 per cent in pay and benefits (don't be quick to judge them until you read the details below...) as well as promises that no one would go after them for participating in the strike.

According to news reports, the Japanese auto giant offered to raise regular workers' monthly starting salary by 24 per cent or 366 Yuan ($54 / €44) to 1,910 Yuan ($290 / €230), which Honda says is "far above the legal minimum wage of 920 Yuan ($135 / €110)".

Interns (students required by their schools to get a work experience that usually lasts between six months to a year and a half) were offered a 477 Yuan ($70 or €57) monthly raise, from a base ranging from 900 to 1,300 Yuan ($131-190 or €108-157) per month.

Reuters reported that despite the violent clashes on Monday, as of late Tuesday afternoon, most regular workers and interns at Honda's Chinese factories have accepted the raise and are ready to get back to work.

However, it is reported that some 100 workers have rejected the Japanese automaker's offer and are refusing to stop the strike. We'll have to wait to see how this works out.

Analysts believe that more employers in China may be forced to follow Honda in offering higher wages to their workers.

"Honda's just the tip of the iceberg, and it reflects the urgency of adjusting China's growth model," said Huang Yiping, an economics professor at Peking University and a former Citigroup Inc. chief Asia economist. "After three decades of rapid growth partly driven by cheap labor, China must adjust to higher wages," Yiping concluded.

Source: Reuters & Bloomberg