An Analysis Of The Employment Effect Of China's Minimum Wage System

Since the implementation of the minimum wage system,the employment effect of the minimum wage system is one of the most controversial research topics in the academic circle.Supporters believe that the minimum wage system has a positive effect on employment,protects the legitimate rights and interests of workers,Narrows the income gap and maintains social harmony and stability.Opponents argue that the minimum wage increases the cost of employment and burdens businesses,which in turn reduces employment,hurts low-skilled workers and widens the income gap.Some scholars believe that the minimum wage has no significant impact on employment.China is in the critical period of industrialization development,and the impact of the minimum wage system on the industrial industry has become an important topic concerned by the government and academic circles.Based on the review of relevant theories and empirical studies on the minimum wage system at home and abroad,this paper adopts the systematic GMM method and builds the panel data model based on the empirical hypothesis to conduct empirical analysis and test on the employment effects of China's overall,regional and industrial minimum wage system,and draws the following basic conclusions:(1)The minimum wage system significantly inhibits employment in China's industrial sector as a whole.There are three main ways to reduce the number of employees: increasing labor costs,reducing industrial profits and the effect of capital substitution.(2)The impact of the minimum wage system on employment is positively correlated to the degree of economic development.With the improvement of economic development in the west,central and eastern regions,the degree of regional marketization gradually increases along with the improvement of enterprise competitiveness,and the employment effect of the minimum wage system changes from inhibition to promotion.The minimum wage system in northeast China has no significant impact on employment due to the concentration of state-owned enterprises and the large scale,high salary and functional nature of state-owned enterprises.(3)In different sectors,the employment effect of the minimum wage system is significantly heterogeneous.The minimum wage system has a significant negative impact on the employment of industries with capital intensity,small scale and low proportion of state-owned capital.It has no significant impact on the employment of industries with labor intensity and high proportion of state-owned capital.The group regression results of the industry were further verified through the subdivision of the industry.