Home / News / World /  Coca-Cola pays its employees to breathe China’s polluted air

How much should a person be compensated to breathe China’s polluted air? If you’re an expatriate employee of The Coca Cola Co. , the answer is a 15% bonus, according to a report last week in the Australian Financial Review. (Local Chinese are excluded from the bonus, despite breathing the same air.) Is offering an environmental hardship allowance enough for multinational companies in China to retain expatriate employees?

A reasonable person might look at the health risks associated with living in China—and Beijing, especially—and conclude that no sane person would take that deal. On some days the air pollution is 25 times worse than what’s considered safe in the US, deaths from lung cancer have risen 465% over the last three decades, and a recent study showed that Beijing residents can expect to spend significant periods of their life infirm.

Many Chinese residents have grown so pollution-aware that they check air-quality rating apps before they check the weather when they wake in the morning, and they converse knowledgeably about air purifiers and masks.

Unsurprisingly, expatriates are quietly leaving China’s biggest cities, with many blaming the pollution and its effects on their children. Everyone, it seems, knows someone who has moved away. I recently left after almost 12 years in Shanghai, and my own departed acquaintances include a physician, a journalist and an intellectual-property lawyer.

For corporate human-resources managers, the pollution issue affects retention and attraction of quality new hires. Who, after all, wants to take a job in a place that the previous holder abandoned because it was harming their kids?

Coca-Cola’s bonus is similar to the hardship differential pay increases that the US state department awards to foreign-service officers serving in posts with difficult circumstances, including notably unhealthful conditions. Officers stationed in parts of Afghanistan, the Central African Republic, Iraq and Libya, for example, earn a top-of-the-chart 35% rate.

Those stationed in Winnipeg, Canada, get nothing. In China, the rates vary from 0% in relatively clean Kunming, to 30% in heavily industrial Shenyang and Wuhan (making them equivalent, in hardship-differential terms, to Haiti). And in Shanghai and Beijing, home to most expats (and US foreign-service officers in China), the rates are 10% and 15%, respectively.

Panasonic also announced in March that it would begin compensating expatriate union employees for the air pollution problem. Did Panasonic’s need for high-quality expatriates trump the risk of damaging relations with local officials sensitive to China’s pollution reputation? Or did the company simply notice that large numbers of wealthy Chinese are also anxious to leave China and decide to offer a financial incentive to keep foreign employees?

It’s hard to believe that offering a bonus will do much to help companies attract or retain people who weren’t already bent on working in China anyway. For those who have been there already, however, and know what it’s like to breathe hazardous air on a cold winter day, a 15% bonus will probably not be enough. Bloomberg

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