Study On Industry Wage Differential During Economic Transformation Period

Since the market economic system reform, China’s income differential betweentown and rural area，regions and industries continue to expand. The change of incomedistribution’s pattern is contrary to our goal of building a harmonious society, it leadsto widespread concern in the society, and becomes one of the hot issues in academicresearch fields. Most of the researches on the industry wage differential arequalitative researches; put forward to many views about performances, reasons, andpolicies of industry wage differential. This paper is based on Marx’s labor valuetheory, explaining and solving country’s industry wage differential by Marx’s wagetheory, and to testing the theory explanation by econometric model, the empiricalresults is consistent with the theoretical expected. This paper is to test and verifyMarx’s labor theory of value in the period of market economy’s transition, and toprovide a theoretical reference for the reform of the income distribution system, andwith certain theory and the practical significance.Through hackling, summarizing, and comparing the classical economics, moderneconomics, it is founded that Marx’s theory of labor value has broad realisticfoundation in our socialist market economy. It is important theory tool forunderstanding, analyzing, and solving our country’s industry wage differential.According to the dialectical relationship between the value and the price, the value oflabor force and wage of Marxism, the industry labor force value is decided by theindustry wage, and the fluctuation of labor market cause deviate of the wage related tothe value of labor force. In the perfect, equilibrium labor market, the wage cancorrectly reflect the value of labor force, according to the principle of the Marxism’slabor compensation, the industry wage differential at that time is the reasonable wagedifferential. But in the condition of institution imperfect and market disequilibrium,the wage cannot correctly reflect the value of labor force, the industry wagedifferential must be adjusted. In the process of China’s economic systemtransformation, the institutional restriction and market disequilibriumoccur from timeto time, so it is an important prerequisite to understand correctly the industry wagedifferential for formulating policies. Through analyzing our country’s industry wagedifferential by using the econometric model, it is founded that the contribution ofreasonable factors on the wage differential is greater than the contribution of other factors, the greatest impact among the latter factors is the monopoly industry.The industry wage differential is the inevitable outcome of the reform of marketeconomy, in the period of research (1978-2010), the changes of industry’s wagestructure were obviously, Discrete level of industry wage distribution was expanded,Gini coefficient and Theil index by calculating the industry data were increased,decomposition of the Theil index showed that the wage differential within theindustry was the main reason of increased industrial wage differential widening.A lot of influence on the economic and social development will be producedbecause of continuous expansion in industry wage differential. It can affect economicgrowth indirectly through consumption and investment, and it will make against theeconomic growth; it can affect the industrial structure through the factor supplystructure and demand structure, it will make against the industrial structure’soptimization; it can directly affect the employment structure, also can affect the totalemployment through economic growth. Through the analysis of the actual situation ofour country, it is founded that it is significant of the relationships between industrywage differential and consumption, investment, economic growth, industrial structure,employment; by using a simultaneous equations model, founded that the relationshipsbetween industry income differential and consumption, economic growth are positive,and the relationships between industry income differential and investment is negative.Through the way of Encouraging actively the reasonable wage differential inprimary distribution, introducing the technology progress, improving the industrylabor productivity, encouraging education investment, to improve the industry humancapital. Regulating strictly the wage differential caused by the institutional restrictionand market disequlibirum, perfect all kinds of market, break the monopoly, accordingto the direction of upgrading of the industrial structure and the industry layout of FDI,adjust the labor’s employment structure and industry industry. Using the tax systemand the social security system to adjust the wage structure.