Minimum Wages in China: Standard and Implementation

Abstract

This chapter describes the history of the minimum wage system in China and analyzes its enforcement by utilizing various sources of data. In 2010, 13% of workers in the sample earn wages below local minimum wages. This result is worse than most of the developed countries but better than countries with about the same level of economic development as China. Both descriptive statistics and regression analysis indicate that some focused groups of workers ought to be targeted when implementing the minimum wages, including female and less-educated workers. The analysis further indicates that the effect of compliance in minimum wages is not only determined by the effort to enforcement, but also correlated with the level of minimum wages, economic structure, ownership type, labor market conditions, etc. The study also implies that the current minimum wage level in China is in accordance with China’s current stage of economic development, and frequent and large increase of minimum wages should be restrained.