Research On The Historical Evolution And Rationality Of Minimum Wage System

A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers on the premise that workers make their normal labor contributions within statutory working time or working hours regulated by legally signed labor contract. As a part of the social security system, it plays an active role in securing the legitimate interests of low-income workers and maintaining social equality and justice. At present all the developed countries and a majority of developing countries are implementing the minimum wage system in the form of legislation. In1994, this internationally accepted system also came into effect in the shape of national legislation in China.With an early start at abroad, research on minimum wage system is thorough and abundant, laying a solid theoretical foundation for the practical implementation. In comparison, China’s study on minimum wage is far from enough. However, economic effects of the minimum wage system have been a controversial issue at home and abroad. Opponents criticize legislation of minimum wage and advocate for economic freedom, saying that legislation of minimum wage will interfere with the supply and demand of market, lower market efficiency and increase unemployment. Supporters believe that the minimum wage system won’t increase unemployment, on the contrary, it contributes to the improvement of vulnerable workers and embodies social justice. Therefore, it is government’s responsibility to secure workers’ fundamental rights with minimum wage system.On the basis of relevant theories, this paper first summarizes the theoretical and practical evolution of minimum wage system, leading to its historical inevitability and rationality; then by means of Panel Data Model and Fixed Effect Model from1995to2010in various regions in China, a empirical study is carried out on the minimum wage system’s influence on employment. It is telling that minimum wage standard won’t exert notable influence on employment and thus it is justifiable. On this basis, we bring forward the following suggestions on policy-making:improve the legal system of minimum wage, step up the publicity efforts to promote minimum wage system, strengthen the functions of labor unions, optimize the collective bargaining system and government’s supervisory mechanism, etc, with the hope of further improvement of China’s minimum wage system.