Improvement Of Labor Income In National Income Distribution

This research is an investigation of how to improve the labor income in the overall distribution of national income. Economics of income distribution is a core research question: the initial distribution determined the basic pattern of labor income. Under the framework of distribution in factors, and combining the basic conditions of two special characteristics of labor market, the labor force itself is powerless to improve their income, rather, this research focuses on the effect of government on the re-distributional actions to improve labor income, that in our view could be a new starting point in the theory of income distribution. Therefore, under this logic, this paper attempts to set up a link between the improvement of labor income with the government policies changes in taxations and expenditures, it is very likely to substantially increase the labor income and quality of life through the optimization of industrial structure , path of urbanization and othersAfter stating the reasons for studying on the improvement of labor income in national income distribution and defining the objects in this study, this thesis reviews the research literatures on economic freedom and labor income theories of classical economics, neoclassical economics, Keynesian economics and Marxist economics. The retrospective and analysis of the economic freedom and labor income theories in the economic history constitute the theoretical start and basis for studying on national income distribution and labor income. On the basis, this thesis summarizes the main determinants about the improvement of labor income, such as the labor relation of the initial distribution, changes in the industrial structure, and the general distribution pattern of the national income.Then this paper analyzes the main difficulties and obstacles in progress of labor income, such as the two special feathers of China's rural labor force, the existing dual structure of the economy and the coexistence of the uneven progression of urbanization, non-coordinated evolution of three major industries and the education effect in the uplift of the labor income has been long neglected. Because of that disequilibrium of the labor market, this paper does not use the established theoretical models to analyze labor income, and rather our theory is based on the effect of government policies (revenue and expenditure) in assessing the labor income in the distribution of national income, by introducing the improved capital income tax and the improved public expenditure policy which emphasizing the role of government in the re-allocation of the national income. In general the main ideas of this model is that, because of the incapability of labor force itself to improve the income, so our focus is on the government policy and how reasonable of policies to ease flow of production factor and so as to rise the labor income.Comparing to the income and consumption tax, the capital income tax may distort the economy most. Under the perfect condition, the optimal capital income tax should be zero. Due to the unreasonable share of the labor- capital in the initial distribution of national income, it is necessary to establish a capital gain tax to distort the existing income distribution in order to improve the return of labor income in respect to the return of capital income. Under the current level of economic development in China and the economic and social development strategy of the"twelfth five year" plan, our model proposes that set a 10% capital gain tax for some part of the secondary industry sector, and use this tax revenue in the consumer investment spending. Those groups of measures which have positive effect on reallocation of the national income distribution, and which also have positive effect on the healthy and smooth flow of the capital stock in order to promote the comparative advantage of the industrial structure. This is the very first improvement on labor incomeBased on the initial improvement in the labor income, further refinement will improve people's livelihood, this is what this paper called further improvement of the labor income. Economics analyze the rational allocation of the resources; in general, it can be interpreted in to the rational combination of factors and people. From a historical point of view, the country's economic development policy is based on the evolution of population pattern. China's last 30 reform strategies were largely based on the China's "demographic dividend". With the development of China's population is about to enter a new historical stage - "Twelfth Five-Year" period, the proportion of working age population to the total population will reach its highest point and starting to drop down, that will a special feather of China's population "old before getting rich" and eventually it will lead to "anti-Urbanization instead of urbanization in the process of economic development. Therefore, improvement of labor income should include more content: It is needed to make the consumption better integration with non-labor in order to make a better combination of factors of production and labor,In fact, according to the double high realities of the number of non-labor and share of non-labor we have to bear in mind that the combination of the production factors and labor should accord with the combination of the consumption factors and non-labor at the same time. The strategy of those combinations of factors should be the basis of the developing urbanization policy, industrial development policy and public policy.To improve the income labor, government intervention is necessary in our view. In the aspect of government tax policy, upgraded capital gains tax is needed to improve the usage of capital and promote efficient flow of production factors, so as to enhance the process of industrial structure optimization and rational process of urbanization, therefore the factors of production could be better combined with the labor force; In aspect of government spending policy, if we adjust the way in solving the big problems of "housing, transportation, and education", then so called consumption and non-labor factor can be effectively integrated in to production process, and so that it could enhance the relationship of factors of production and labor , which will eventually help improve labor income Improvement in labor income is largely relied on the full development of human potential, in here effective combination of other factor is need to achieve a full potential of people, labor income growth should be the core of the economic growth and human progress.