On The Wage Level At The Stage Of China's Economic Take-off

This paper makes economic take-off, a decisively significant stage in developing countries' industrialization and modernization, as its background, and studies the appropriate wage level in rapid economic growth and the function of wage mechanism in economic take-off.This paper has a retrospect of the development and evolution of wage theories in two hundred years firstly. Then it gives a empirical analysis for the determinants of wage level and their features in the U.K. of its early take-off stage and two emerging industrial economies of developing countries ---Latin American countries and East Asian Dragons. The author find the U.K. in its early stage preserved wage level, Latin American countries failed to keep coordination between wage level promotion and economic growth while East Asian Four Dragons could successfully do it. Finally, This paper still gives an analysis for the determinants of wage level and their features in China in the planned economy period and change of wage level since the reform and opening-up. From which we can get a lot of inspiration.The inspiration can be summed up as followed: Wage is the price of labour, which is the most important factor of production under the circumstance of market economy. It is determined by both demand and supply of labor. Wage level is an important element to affect the operation of market economy. Market mechanism is an integrated body, which consists of market of essential factors, commodity market, etc. Any asymmetry of one market will lead to the unblance of the whole market mechanism. It is impossible for the whole economy to set up complete market economic system provided wage is not decided by market mechanism. So the wage level must be determined by the compitition between the supply side and demand side of labor.Since reform and opening-up, China's economy has been growing at high speed. In 2002, the total GDP has made a breakthrough of U.S. $1,000 billion and per capital GDP has reached $1,000. China is moving forward to the stage of "sustained growth", and is on the way to the well-to-do society.Economic theory and practices in some other countries show that if the per capital GDP has reached U.S. $1,000, the payment for labor forces will rise more rapidly and wage level will be substantially promoted, which is an inexorable reflection when the economic development has stepped on a certain stage. Seen from the wage variation in China, wage level hasn't been greatly raised, or keeps relatively low. Moreover, the increase of wage level has always been behind economic growth and the difference between them is still expanding. If this situation keeps on, economic development will be inevitably affected. In fact, we have witnessed the adverse effect even at present, which is shown from the following aspects:Consumption demand in domestic market is relatively small. Domestic market scale depends on population, consumption propencity and purchasing power. Payment for labor forces is an important endogenous variable. A low payment means a low wage level and a low wage level induces the low consumption. In recent years, expansion of domestic demand and consumption stimulation have been the main problem in the implementation of active financial policy for government, expansion of domestic demand has become a strong carriage to push forward economic growth. However, investment makes more contribution to the growth of GDP compared with consumption. Additionally, low consumption has brought chain react on evolution of industrial structure. This poses a problem of irrational proportion between accumulation and consumption for China.The income gap among individual resident is excessively big. The reason for such gap mainly lies in non-wage income (including the gray income and the illegal income). However, such mentioned income is held by few people, the majority still have low wages as their income source, especially the great number of farmers. What has caused the comparatively low wages? In addition to the restriction of traditional sy...