(chinadaily.com.cn)
Updated: 2007-07-10 10:50

The Beijing Municipal Government adjusted minimum wage standards and unemployment insurance and severed the link between them in a move to urge the unemployed to find work instead of relying on unemployment insurance.

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In recent years, minimum wage has been on the rise. Unemployment insurance payments, previously linked to minimum wage, had been increasing rapidly. The result was rising living standards amongst the unemployed but at the same time it served as an incentive for them not to search for work.

After the adjustment, the level of unemployment insurance will be higher than urban minimum living standards but lower than minimum wage. Meanwhile, the municipal government also raised the standard of minimum wage in order to expand the gap between minimum wage and unemployment and in order to encourage higher levels of employment.

As a result of the new measures, the city will save more than 600 million yuan (US$79.1 million) this year, to be used to train the unemployed, offer them more job opportunities and subsidize social insurance.