The Analysis Of The Influence On Labor Remuneration To Labor Productivity Of Chinese Manufacturing

Low labor costs is the main power of China’s fast growing economy all the while since the Reform and Opening-up began. We depend on the advantage of low labor costs in the economy development, seized the opportunity in global industrial transfer, and develop to be the center of the world manufacturing rapidly. However, low labor costs also bring lots bad influence along with the continuously upgrading of economy level and transformation of economy structure, such as the "lack of labor" problem in2004. Is the era of depending on the low labor costs as for the engine of economy development coming to the end? If the low labor costs is the great advantage of our economy in the early days, then what will it affect under the background of industrial upgrading and economic growth mode transformation? This article discusses the relationship between labor remuneration and labor productivity with the domestic manufacturing data in order to show the influence.This article adopts the data of manufactures which are state-owned and whose annual sales revenue is more than5million RMB. First it makes a cointegration test between labor remuneration and productivity in each area and each industry all over China, and finds that they two have a long-term balanced relationship; then strongly analyzes the influence of labor remuneration to productivity by panel data model. From this research, the increase of labor remuneration has an obviously positive influence on productivity, the middle of China has the strongest influence, and then the east and the west last. It explains that adding the labor remuneration is good for the middle area to increase the productivity; but for the east and west, it influences less. For the demonstration analysis of influence by adding labor remuneration in each industry to productivity, each industry has different influence coefficient and intercept. This explains that they have comparatively great difference. As a whole, capital-intensive industry has comparatively high labor remuneration and productivity; labor-intensive industry has low; and labor capital-intensive industry has the middle.