Recently, many places have issued notices on the increase in the base and proportion of social security contributions, which has aroused widespread concern from all walks of life. Shenzhen also announced at the end of 2023 that the lower limit of the social security contribution base will be raised from 2,360 yuan to 3,523 yuan from January 2024. In the face of the continuous expansion of social security expenditures and income difficulties, all localities are suffering from "no way to raise prices".
The legitimacy of the social security price increase has been questioned, and the hand of legal supervision cannot be reached. In the case of limited income**, the increase in social security prices seems to have become an inevitable choice to deal with the imbalance between income and expenditure. However, there are different views on whether frequent price increases can solve the fundamental problem.
Analysis of the reasons for the increase in social security prices.
Pension expenditures have increased and income** is limited.
China's aging rate is extremely fast, and the population aged 65 and above has reached 20.2 billion. Spending pressure on pensions for retirees is intensifying. Taking Shenzhen as an example, the income and expenditure of the city's basic pension insurance for employees have been in the red for two consecutive years, with a loss of 8.3 billion yuan in 2022.
Aging has led to a decrease in the number of insured people, making it difficult to sustain income. The return on investment in pension insurance is also declining year by year, and is expected to be less than 3% in 2022. Income growth is sluggish, and the imbalance between income and expenditure of old-age insurance is prominent.
There is an imbalance between the income and expenditure of social security, and the deficit is aggravated.
In addition to pension insurance, other social security categories are also facing varying degrees of income and expenditure pressure. According to the Ministry of Human Resources and Social Security, in the first three quarters of 2022, the national medical insurance revenue** accounted for only 88% of expenditure.
In many regions, medical insurance** has bottomed out, and risk reserves have to be activated. At the same time, unemployment insurance** and other difficulties also exist to varying degrees. Overall, the current imbalance between income and expenditure of social security has become increasingly severe.
Alleviate the burden of social security premiums on enterprises and improve the level of social security.
At present, the proportion of social security contributions of enterprises in many regions is high, which increases the operating costs of enterprises to a certain extent. Appropriate adjustment of the social security insurance rate and base can alleviate the burden on enterprises on the premise of ensuring social security income. In addition, increasing the social security payment base is also a necessary means to improve the future pension level of the insured.
Businesses are being tested in their ability to bear the burden.
Micro, small and medium-sized enterprises (MSMEs) have limited capacity and are in urgent need of policy support.
Due to the long-term stay at the minimum contribution base level, the burden of social security premiums on micro, small and medium-sized enterprises will increase significantly. Taking Shenzhen as an example, if all employees pay according to the minimum base of the new regulations, the enterprise will spend more than 160 yuan per person per month. This is difficult for many low-profit enterprises to bear. It is recommended to introduce targeted reduction and exemption policies to reduce the burden of social security premiums on micro, small and medium-sized enterprises.
The price increase may lead to an increase in labor costs, and some enterprises are facing the risk of layoffs.
Social security premiums** will directly lead to an increase in the labor cost of enterprises, especially for labor-intensive enterprises. If we cannot disperse the pressure of price increases by improving operational efficiency, it cannot be ruled out that individual companies will take measures to reduce costs, which will affect employment. In addition, it may also encourage some enterprises to choose informal employment, exacerbating hidden employment risks.
Encourage enterprises to broaden their revenue channels and improve their affordability.
It is recommended to encourage enterprises to broaden the channels of profit growth and improve profitability through tax incentives and other means. At the same time, it can provide convenient measures such as deferred payment of social security premiums and installment payment to help enterprises cope with the short-term decline in affordability and avoid the risk of payment interruption.
The basis for the price increase should be reasonable, and the adjustment range should not be too large.
A robust social security system requires a consistent and stable income**. However, considering that the price increase will increase social costs, the basis should be reasonable, and the adjustment range should not be too large. It is recommended to formulate a long-term price increase plan with reference to factors such as average wage growth, inflation level, and economic growth, rather than one-sidedly adjusting arbitrarily on the grounds of making up for the shortfall. At the same time, it is necessary to improve the efficiency of social security and reduce expenditure.
Recommendations and outlook.
It is recommended to improve the regulations on social security price increases and strengthen supervision.
It is recommended to issue a legal document on the social security fee standard as soon as possible, clarify the basis, procedures and regulatory measures for price increases, and avoid a regulatory vacuum. At the same time, it is necessary to improve the social participation and supervision mechanism to prevent unreasonable price increases from harming the social and public interests.
It is expected to increase social security income through multiple channels and steadily implement the price increase strategy.
Price increases are not the way out. It is necessary to achieve stable growth in social security income from the aspects of investment and operation, delayed retirement, and overall planning of urban and rural insurance. On this basis, the price increase strategy can be steadily implemented to gradually improve the level of social security benefits. Allowing the people to live a happy life is the purpose of the construction of the social security system.
Epilogue. Frequent price increases cannot fundamentally solve the problem of imbalance between social security revenue and expenditure, and we must pay attention to improving the operational efficiency of the system. At the same time, price increases are not without legal constraints, and decision-making departments must abide by the spirit of the rule of law. Adapting the social insurance system to the requirements of economic and social development and benefiting the whole people in a more sustainable way requires the joint efforts and wisdom of all sectors of society.