Why is the social security contribution rate in China so high?

Why is the social security contribution rate in China so high?

A few days ago, some media reported that China's social security expenditure accounted for more than 40% of individual wages. In the past 30 years, employees, enterprises and individuals with an average wage level in Beijing have paid nearly one million yuan, of which the part undertaken by enterprises theoretically exceeds 70% of the total.

China's social security is paid jointly by units and individual employees, which is roughly 20% and 8% of the personal salary of pension insurance units and individuals respectively; Medical insurance: units and individuals pay about 10% and 2% respectively; Unemployment insurance: units and individuals pay about 2% and1%respectively; Maternity insurance: the unit pays about 0.8%, and the individual does not pay; Industrial and commercial insurance: the unit pays about 2%, and the individual does not.

The contract of the five contributions is 46% of the individual salary, of which the unit contribution accounts for about 35% of the employee's salary, and the individual contribution is about 1 1%. This means that 76% of the social security expenditure of 6,543,800 yuan will be borne by enterprises. Although the specific payment ratio varies from place to place, it is an indisputable fact that the payment ratio is generally high.

During the two sessions this year, Ma Kai, Vice Premier of the State Council, said that the payment level of old-age insurance in China was on the high side. Of the 12 countries in the world, 1 1 is in Europe, and the other 1 is China. Europe 1 1 High-rate countries correspond to high welfare, while high-rate countries in China correspond to low welfare. This is the first time that the government has admitted that China's social security rate is high.

Why is the social security contribution rate in China so high?

The main reason is that when social security was cut off and "enterprise pension" was changed to "national pension", it was not given enough financial guarantee. In order to raise funds, we have to levy more taxes, which is equivalent to "supporting the elderly with employees' money" and "eight quit eating pig's feet". The high social security contribution rate is actually paying for the "policy fault".

What are the consequences of high social security contributions?

Due to the high social insurance premium rate and the low proportion of national income and the rapid growth of fiscal revenue for 20 consecutive years, the squeeze on employees' wages and enterprise accumulation is also deepening. The direct consequence of squeezing employees' wages is that personal consumption power is getting less and less, and the pulling effect of consumption on the economy is declining. The consequence of enterprise accumulation and extrusion is that the investment ability of enterprises is reduced and the motivation of sustainable development is weakened.

Moreover, in terms of international competition, in Europe, 1 1 welfare countries with high rates, enterprises do not need to face the pressure of the government because of layoffs, and the government does not need to bear the stable pressure because of layoffs, and employees will not lose their lives because of unemployment. In China, enterprises, individuals and the government are facing enormous pressure to keep jobs and prevent unemployment. The total labor cost pushed up by social security costs has also become one of the main obstacles to enterprise restructuring and mergers and acquisitions.

In the past year or two, the government has done a lot of work to reduce the burden on enterprises, but it seems that there is no policy that is more conducive to reducing the burden on enterprises and promoting consumption than reducing the proportion of social security contributions.

Experts suggest that we should solve the social security problem as soon as possible, increase the state financial subsidies for social security, reduce the burden on individuals and enterprises, and gradually reduce the social insurance rate to 30%-35%. Even so, China belongs to the category of countries with a high rate of 30% in the world.

What if the social security fund reduces the proportion of contributions and cannot make ends meet?

To raise social security funds, delaying retirement alone cannot solve the fundamental problem. The problem of policy should be solved by policy. The most fundamental thing is to speed up the implementation of state-owned shares to social security.

In this regard, Shandong is at the forefront of the country. In February this year, Shandong issued the Plan of Transferring State-owned Capital of Provincial Enterprises to Enrich Social Security Fund, proposing to transfer 30% of state-owned capital of 47/kloc-0 state-owned enterprises in Shandong Province to enrich the provincial social security fund. This is the first time in China. The Shandong Provincial Government held a ceremony on May 18, officially transferring 30% of the state-owned capital of three provincial state-owned enterprises (Shandong Energy Group, Shandong Airport Co., Ltd. and Shandong Salt Industry) to enrich the provincial social security fund by about 3.3 billion yuan. In the next few years, Shandong Province will complete the equity transfer of all provincial state-owned enterprises.

Zhang Hongan, deputy general manager of central huijin Investment Co., Ltd. commented on this: the reform of state-owned enterprises in Shandong is "full of reform ideals". This evaluation is no exaggeration.

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