The Income Distribution Effect Of The Minimum Wage System

Since the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China,China has gradually established a socialist market economic system and distribution system with Chinese characteristics in accordance with the guiding principle of "primary distribution emphasizes efficiency and redistribution emphasizes fairness." This system has greatly stimulated the enthusiasm of the majority of laborers and owners of production factors and promoted the rapid economic growth of China.At the same time,with the rapid development of China's economy,the contradiction in income distribution has become increasingly prominent.Due to the frequent occurrence of social problems caused by uneven distribution of income,"social hatred",intensified poverty,lack of domestic consumption,and "Matthew effect" in human capital have attracted wide attention from all walks of life.The 19 th National Party Congress summarized the main contradictions of the Chinese society in the new era as the contradiction between the people's ever-growing needs for a better life and the unbalanced and uneven development.On December 30,2003,China's Bureau of Human Resources and Social Security formally promulgated the "Minimum Wages Regulations." Its purpose is to improve the income status of low-income workers,curb the expansion of income distribution gaps among residents,and ease the contradiction between labor and capital.As a public policy to improve the distribution of residents' income,the minimum wage system has been entrusted with heavy responsibilities by all levels of government.The income distribution effect of the minimum wage system has also become an important issue for the academic community.In this paper,based on reviewing and combing research literature and theoretical models related to the income distribution effect of the minimum wage system both at home and abroad,using the micro data of Chinese industrial enterprises for 2011-2012,using the minimum wage of the eastern province Jiangsu Province for 2011-2012.The “quasi-natural experiment” with rising standards and the fact that Shenzhen's minimum wage rate rose from 2011 to 2012 and the increase in the minimum wage rate in Chengdu and Wuhan,2012-2013 in the central and western regions,using double-difference research methods to the lowest The income distribution effect of the wage system is empirically analyzed and tested,and the basic conclusions are as follows:First,the minimum wage system has a significant positive effect on income distribution.Raising the minimum wage rate will help increase the proportion of labor income and improve income distribution.Second,There is no significant regional difference in the impact of the minimum wage system on income distribution.The minimum wage system in the eastern,central and western regions of China has a significant positive effect on income distribution,and its impact degree is almost the same.It shows that the implementation of the minimum wage system in the eastern,central and western regions of China will help increase the proportion of labor income and improve income distribution.Third,there are significant industry differences in the impact of the minimum wage system on income distribution.The existence of industry differences does not affect the direction of the impact of the minimum wage system on income distribution,but it significantly affects the degree of influence of the minimum wage system on income distribution.Fourth,employment and average wages have a significant positive mediating effect on the income distribution effect of the minimum wage system.It shows that raising the minimum wage helps increase employment and increase average wages,thereby increasing the proportion of labor income and improving income distribution.