The Effect Of Minimum Wage On Employment In Tianjin

As a Labor security system permitted internationally, the employment effect of the minimum wage has been a broad and sustained attention. Whether foreign or domestic, whether theoretical or empirical, for the study of the employment effects of minimum wage, these conclusions were different, even antithetical.The scholars did not reach a unified and persuasive conclusion. It demonstrated a significant regional differences, which means that the importance of sub-regional study. Tianjin as one of four municipalities in China,is the largest open coastal city in northern and the economic center of the regional around Bohai Sea. It attracts a large number of migrant workers, and most of them are engaged in labor-intensive industries. Their wages are low, so they are sensitive to change the minimum wage. Therefore,it has very great practical significance to study the effect of minimum wage on employment in Tianjin.Through two analysis ways of statistical data and empirical econometric, it found that the minimum wage in Tianjin had a significant negative effect on employment. But in Beijing, Shanghai, Guangzhou, the minimum wage had a positive effect on employment. For this phenomenon, it created a hierarchical model of the labor market from the view of labor heterogeneity. By calculating the elasticity of the minimum wage on employment about the two markets of high-income workers and low-income workers, it analyzed the employment effects of minimum wage. On the basis of the theoretical model, By examining the structure of labor markets in Tianjin, Beijing, Shanghai, Guangzhou, and being combined with the industrial structure, it found out the key factor which resulting in the different empirical conclusions of the various regions. That gave a reasonable explanation for the different effects of minimum wage to employment in various regions.The conclusion is that,the minimum wage in Tianjin has a significant negative effect on employment,but the minimum wage in Beijing, Shanghai, Guangzhou has a positive effect on employment. There are regional differences in the effect of minimum wage on employment. Through the hierarchical model of the labor market, it finds that,the final employment depends on the elasticity of the minimum wage on employment about the two markets of high-income workers and low-income workers, and the ratio of the two types of workers.The elasticity of low-wage workers is greater,or its proportion is greater, the minimum wage is more likely in a negative effect on employment. By examining the structure of labor markets under different industrial structure in four cities, it finds that the industrial structure of those cities is more top-quality,the proportion of low-income workers is smaller, the minimum wage is more likely in a positive effect on employment. This explains the phenomenon about different effects of minimum wages on employment in Tianjin and Beijing, Shanghai, Guangzhou.