Efficiency Wages, Profit Sharing And Wage Differentials Between Enterprises

Since the reform and opening up, China's economic development has secured great achievements. The income-effect enables laborer's wages rising constantly as a result of economic growth, but in the same time, the wage differences are also growing. Actually, the large difference between workers of different industries is not a true reflection of labor productivity, but due to certain companies monopolizing the market and other system factors. Especially, wage disparity among different industries has already attracted much attention of theoretical circles and become the research focus; however, the wage Differences between enterprises still demands much quantitative research.This dissertation attempts to research wage disparity between different enterprises from the view of efficiency wage and profit sharing, which is of theoretical and practical significance. There are loads of factors influencing wage levels between different companies. This paper selected corporate profitability levels, human capital difference, firm sizes as the main elements, choosing data from 2002-2009 of 40 firms of Shanghai Stock Exchange from Shandong province, with a systematically analysis on these figures. The result showed that listed companies in Shandong Province proved the industry different playing a significant role in diverse wage levels, meanwhile, corporate profitability levels,human capital differences,firm sizes also contributing substantially, thereby proving that profit sharing is a key source of wage disparity among different companies. Based on this information, recommendations on speed up economic restructuring, promotion to enhance entertainments profitability, reduce the human capital gap, improving labor market, reducing resistance of labor mobility, raising the minimum wage and other related policy were given.