By Cao Li (China Daily)
Updated: 2008-03-26 08:53

The Shanghai municipal government yesterday announced a 14-percent increase to the minimum wage in a bid to help those on low incomes better cope with the rising cost of living.

The monthly rate will be increased from 840 yuan ($120) to 960 yuan, with effect from Tuesday.

This is the second increase in five months in Shanghai, whose minimum wage is now the highest in the country.

"Inflation has had a big impact on people on low incomes in Shanghai," Bao Danru, director of the municipal labor and social security bureau, said.

"That's why we have introduced the largest increase for several years."

Shanghai's unemployed will also get up to 70 yuan more a month, taking the average payment to between 410 yuan and 550 yuan. The actual amount depends on the person's age and number of unemployment insurance contributions they have paid, Bao said.

City dwellers living below the poverty line, or unable to work, will be given an additional 50 yuan a month, he said. Government aid for people in urban areas will rise from 350 yuan to 400 yuan a month, while non-urban dwellers will get 3,200 yuan per year, up from 2,800 yuan.

Currently, 339,400 people who work in the city and 118,300 non-urban workers receive aid from the Shanghai government, Bao said.

All of the wage and benefit increases will come into effect on Tuesday, he said.

Over the past year, inflation in China has risen steadily.

Zhang Zheren, deputy director of the municipal civil affairs bureau, said: "Since April, the price of food, especially pork, has risen considerably."