A Study On China’s Minimum Wage And Minimum Standard Of Living On The Perspective Of Employment And Welfare

The early postwar period, Western Europe and the Nordic countries first establishedthe modern social security system. In1894New Zealand was first implemented aminimum wage system. Since the birth of two systems, welfare effects and employmenteffects are the focus of debate among scholars but no consensus.First of all, the paper studies the origins and development of minimum wage and theminimum living security system in China. Found that the standard of the two policies arelow, weakening the low-income people’s welfare and employment. Secondly, a case inWuhan based on field research data, the paper studies that the minimum wage there lagsbehind the growth in average wages and the growth of GDP per capita, and the ratio of thelowest living security line and the disposable income of urban residents is lower than thatof the international standard. Draw conclusions from the analysis: On the one hand,despite the low level of subsistence prevents the "social maintenance lazy" fromhappening, it weakened the subsistence of the core-the basic welfare and securityfunctions. On the other hand, the low level of "minimum wage" maintains the survivalneeds, but it is difficult to bear and raise the quality of labor and other family members tosupport the development of the type of demand, resulting in weakening of the functionsthat "minimum wage "system should function to protect the interests of workers. And thegap of the two lines is too small if workers need to pay social insurance, which will be anawkward phenomenon that employment income is less than the minimal income. Positivestimulus to employment was offset by low welfare policy, so the employment of a positiveincentive effect is not obvious.Furthermore, because between these two systems andpolicies lack of care of each other and butt that will be easy to form the conflict betweenthe policy and game low efficiency.In addition, in order to develop a standard that can minimize the negative effects ofemployment and maximize the reduction of poverty, the paper uses "Martin Act" and the"least squares"(OLS) to analyze and classify the eight categories of consumer products in Wuhan from2000to2009,and then calculate per capita consumption of the "survivalline","food and clothing line" and "development line", and in accordance with theproportion method which can be used to calculate three different levels of minimum wageand the minimum living security line in2011.Finally, the recommendation is that thegovernment establishes minimum living standard security line which should refer tocurrent price levels and consumption of the Engel coefficient, and formulates theminimum wage which should consider the average wage level, the local minimum livingstandard security line and unemployment insurance and other factors. That will build aperfect social security assistance system.