Large state-owned enterprises generally have a high base in terms of social security contributions. This is not accidental, but closely related to a number of factors. First of all, we need to understand how the social security contribution base is determined. This base is actually closely tied to the employee's salary. After the social security tax reform in 2019, it is clearly stipulated that the employer must strictly determine the social security contribution base according to the employee's own salary.
Such a provision has far-reaching implications. On the one hand, it ensures that every employee receives social security that matches their income. If an employee's salary is less than 60% of the local average social wage, then his social security contribution base is the lowest 60%. Similarly, if an employee's salary is higher than 300% of the local average wage, then his social security contribution base is the highest 300%. For those employees whose wages are between 60%~300%, their social security contribution base is completely based on their actual salary.
Such a system design ensures the fairness and sustainability of the social security system. For large state-owned enterprises, due to their generally higher wages, the corresponding social security contribution base will also be increased accordingly. In addition, these companies often have strict financial management and compliance requirements, which also prompts them to opt for a higher social security contribution base to ensure compliance with national laws and regulations and to maintain their reputation. However, for some lower-paid employees, they may face greater pressure to pay. To address this, many businesses offer a variety of benefits and subsidies to help employees better cope with the financial pressures of social security contributions.
Unfortunately, however, in most private companies, providing employees with a high base of social security contributions has become a luxury. Many employees are facing low wages and a low social security contribution base, which not only affects their quality of life, but also exposes them to more uncertainties and risks in the future.
In fact, we believe that most private companies do not pay less than 60% of the average wage in their area. This is because 60% of the average social wage is a relatively low wage level, and if the wages of most employees are lower than this level, then there may be certain problems with the economic development and people's living standards in this region.
Taking the actual data as an example, if calculated according to the standard of 60% of the average social wage, the wage level in many areas can even reach more than 4,000 yuan. However, the reality is that many people earn well over $4,000. This shows that in private enterprises, it is in line with the actual situation and the needs of economic development to provide employees with a reasonable social security payment base and salary benefits.
If you just look at the social security situation of private enterprises, you may not feel that there is anything wrong. Because in this environment, everyone generally believes that this is normal, and many people pay according to this low base insurance level. Without employees of state-owned enterprise units to compare, this practice may even be considered a "standard" practice within the industry.
Although the proportion of state-owned enterprises and enterprises directly under the central government is relatively small, the level of their employees' contribution base in terms of social security participation is very high. This is in stark contrast to the practice of most private enterprises. Private enterprises tend to pay social security contributions based on a lower base, while state-owned enterprises determine the social security payment base based entirely on the actual wages of employees. This practice not only fully protects the rights and interests of employees, but also reflects the great importance that state-owned enterprises attach to social responsibility.
Of course, some people may think that this is where state-owned enterprises do better than private enterprises. However, I don't think that's where the superiority of SOEs lies. On the contrary, it is simply that they have strictly fulfilled the relevant responsibilities and obligations and have not neglected the interests of their employees. For state-owned enterprises, it is their bounden duty to protect the social security rights and interests of their employees. They are well aware that only by protecting the basic rights and interests of employees can they truly stimulate their enthusiasm and creativity, so as to promote the long-term development of the enterprise.
However, for China's private enterprises, the situation is different. These companies are often owned by shareholders or private entrepreneurs, who pay more attention to the profitability and cost control of the enterprise. In order to reduce labor costs, many private enterprises will choose to pay social security for their employees according to the minimum standard, that is, 60%. In this way, although the company saves a certain amount of costs in the short term, in the long run, it not only harms the interests of employees, but also greatly reduces the pension they can enjoy after retirement.
From an objective point of view, this difference reflects the different attitudes of state-owned enterprises and private enterprises towards employee social security. The high contribution base of state-owned enterprises shows that they attach importance to the welfare of employees and their fairness, while the low contribution base of private enterprises exposes their short-sightedness and selfishness in social security.
But in fact, the essence of this difference is not just the difference between private and state-owned. It is more about the company's awareness and attitude towards social responsibility and employee welfare. The reason why state-owned enterprises are able to pay social security according to the normal standard is that they pay more attention to the long-term development of enterprises and the rights and interests of employees, while the reason why private enterprises choose a lower payment base is because they lack sufficient attention and responsibility in the treatment of employee welfare.