The Relationship Between The Minimum Wage And Exports

Changes in the minimum wage have a very direct impact on the supply and demand of the labor market.Each increase in the minimum wage raises labor costs.In order to maintain international competitiveness,the government begins to encourage enterprises to carry out upgrading and reform.The Pearl River Delta is a typical region from the economically strong region that exports low value-added products to the current upgrade and transformation.Therefore,this paper will use the Pearl River Delta region as a research area to analyze the impact of the minimum wage standard on exports.Based on the theory of minimum wage limit,factor endowment theory and efficiency wage theory,this paper summarizes the impact of minimum wage on exports,and concludes that the factors affecting exports by minimum wage are mainly labor cost effects and Labor efficiency effect.An increase in the minimum wage will increase labor costs,which may have a negative impact on exports,but an increase in the minimum wage will also increase labor efficiency,which may have a positive impact on exports.By constructing an econometric model of minimum wage and export relationship,this paper conducts an empirical study on the impact of the minimum wage standard on exports in the Pearl River Delta region.Studies have shown that in the Pearl River Delta region,the increase in the minimum wage has a positive impact on exports in current,but overall,the impact of the minimum wage increase on exports is “inverted U-shape”.The explanation is that within a certain rage,the labor efficiency effect caused by the increase in the minimum wage is stronger than the increase in the absolute labor cost,but when the minimum wage exceeds a critical value,the effect of absolute labor costs will exceed the efficiency effect.Then,the increase in the minimum wage will have a negative impact on exports.In view of the current development status of the minimum wage,the minimum wage is still in a low state.Combined with China's special period of economic transformation and upgrading,the reasonable upward adjustment of the minimum wage standard can stimulate enterprises to transform and upgrade and promote exports to a certain extent.Therefore,this paper suggests that the minimum wage standard can be reasonably raised as a transitional auxiliary tool.