The Impact Of The Minimum Wage On The Employment Of Private And Individual Employees In Cities And Towns

The main purpose of the minimum wage system is to guarantee the minimum wage can maintain the basic survival needs of workers and their family members. Since the implementation of the minimum wage system in 1994, it has been attached more and more importance to the party and the government. But the minimum wage system also raised a lot of people’s questions, people are worried about the minimum wage will increase labor costs, thereby reducing the employment, the low income groups probably the first to be affected, which is contrary to the purpose of the minimum wage system-- protecting low-income group.The Yangtze River Delta, as the most developed area of our country, has concentrated a lot of urban private and individual departments. The wages of workers in these departments are relatively low, and the impact of the minimum wage system is relatively large. In order to examine the impact of the minimum wage system on employment, the paper uses the data from 1994 to 2012 of the Yangtze River Delta to carry out regression analysis. The explained variable of the model is the employment proportion of the urban private and the individual labor, the explanatory variable is the minimum wage, and the related variables are controlled. The results show that, in general, the minimum wage will promote the employment of urban private and individual labor. And after the discussion of different area, we found that the employment effect of the minimum wage in Shanghai is the most significant, and Zhejiang province is the second, but the employment of the minimum wage standard in Jiangsu province is not significant. This is mainly due to the minimum wage standards in Yangtze River Delta region is relatively low, and the labor market shows an obvious characteristic of buyer monopoly. And the reasons why there are differences among three provinces, firstly Shanghai minimum wage adjustment frequency is the highest, and the enforcement of the minimum wage system is the strongest, these will play a good role in signal function; and the relative level of the minimum wage in Shanghai is the lowest, there is a lot of room for increase. Secondly due to the relative more developed SMEs in Zhejiang Province than in Jiangsu Province, it needs more minimum wage workforce, leading to differences in the effects of the minimum wage system of employment in two provinces.In the end, this paper based on the basic theory and empirical research of both domestic and abroad, the characteristics of the labor market in the Yangtze River Delta region and the results of empirical analysis. And this paper proposes several policy recommendations on how to improve the system of minimum wage in China at last:1, establish a dynamic adjustment mechanism; 2, regulate the irregularities in labor market; 3, increase investment in human capital.