Increase Labor Compensation In The Private Economy

China has achieved rapid economic development since China’s reform and openup, The gross domestic product has grown rapidly, the labor productivity of workershas also made substantial increase. However, the compensation level of workers hasnot kept up with the pace of the economic development, the workers can not share thefruits of the economic progress, the workers hard-working did not get the reword theyshould deserved.This phenomenon is particularly prominent in private economy.Firstly, this paper proposes the concept of "the social function of laborcompensation", and on this foundation, this paper discuss how to increase laborcompensation in the private economy from the perspective of the social function oflabor compensation. the level of the income will have an impact on workersthemselves, their families and the development of the entire society, The level of thelabor’s compensation is related to the consumption level of workers, will affect thestability and healthy development of the private enterprise itself and social harmonyand stability. Meanwhile, the compensation level of the workers also will affectChina’s extensive economic development pattern and the balance development of thethree industries and the two departments as well, we should and must consider thelabor compensation’s social function as an important factor to set up the laborcompensation in the private economy.Secondly, this passage has an analysis on the labor’s distribution condition, theproportion of the labor compensation in GDP has decreased year by year. The laborcompensation did has increased, but the growth rate is very small, far behind the paceof GDP growth. In contrast, the proportion of capital compensation in GDP hasincreased year by year, the growth rate of capital compensation is far greater than thegrowth rate of labor compensation, the proportion of labor compensation and capitalcompensation has decreased. The compensation level in private economy is too low.Then, this passage discussed the reasons why the income compensation in theprivate economy is too low. The corporate did not establish a sound wagedetermination mechanism, the phenomenon that the wages workers received belowthe minimum wages is widespread. The wage distribution of private enterprise is veryarbitrary, the wage distribution of workers is highly subjective, the private enterprisesdid not establish the regular income increase mechanism for the workers, the distribution of the workers income exists many irrational phenomena, the owner ofthe private enterprise arrears, deductions, eats the workers wages is very common,The workers rarely have the opportunity to enjoy the share of the private economysurplus value. As in the specific wages determination in the private economy, theworkers has a weak sense of participation, some union leaders did not have highquality, they are in a weak position when in the negotiations with the privateeconomy.The government’s macro-control is not fully effective as in the distributionof the income. The major reason that causes the low level of labor compensation is theweakening of social function of labor compensation.Finally, this paper proposes some measures to increase the compensation levelsin the private economy, we need improve the minimum wages system, make full useof the workers union, improve the system of the collective wage negotiations, employthe network monitoring, establish a link between the workers wages paying and theavailability of financing and the number of the financing from banks. Graduallyimprove the mechanism for guaranteeing payment of employee wages and improveincome distribution of the enterprises, workers should have the right to be involved inthe distribution of profits, and strengthen the government’s macro-control of theprivate enterprises’ income distribution.