Minimum Wage and Common Prosperity:Theoretical Logic and Chinese Practice
The Chinese path to modernization is a modernization of common prosperity,and achieving common prosperity is an inevitable requirement of socialism with Chinese characteristics.Narrowing the income gap to achieve common prosperity has become an important focus and inevitable requirement for China to continuously improve the quality of economic development and people's happiness and cross the"middle-income trap."China's low-income population is still large,and the key to promoting China's common prosperity is to increase the income of such people.In addition to major strategies such as poverty alleviation,the minimum wage,as a conventional policy tool,is an important means for the government to intervene in the primary distribution of the labor market and adjust the income distribution.Formulating and adjusting the minimum wage standard must be done cautiously.Once it deviates from the actual economic development and employment situation,it may damage the income and employment of the policy target group and hinder the promotion of common prosperity.As an important policy tool in the"14th Five-Year Plan,"whether the existing minimum wage standard in China has played its due role in promoting common prosperity and how to optimize it scientifically and reasonably are of great significance.In this study,we construct a theoretical model and conduct simulations to determine that the most effective range for the minimum wage standard is between the 25th and 30th percentiles of the wage income distribution.Based on this finding,we empirically test the impact and heterogeneity of the minimum wage standard on common prosperity across different regions in China during the new era.The results reveal that the minimum wage standard in all regions of China has improved the common level but has inhibited an increase in the level of prosperity,and its role has shifted from suppression to promotion since 2019 due to continuous optimization.The digital economy and advanced industrial structure have enhanced the positive impact of the minimum wage standard on the level of prosperity,while poverty alleviation policies have strengthened its income distribution effect.The relationship between modernization and the impact of the minimum wage standard on common prosperity is closely related.The higher the efficiency of urbanization and the stronger the economic development potential,the better the promoting effect.Compared with existing studies,the contributions of this study are as follows.First,based on the wage,ripple,and employment effects,it constructs a theoretical model of the impact of the minimum wage on income level and income gap and depicts the general impact of the minimum wage standard change on both through simulation analysis.Second,based on city-level data,it incorporates income level and income gap into the same framework and explores the impact of the minimum wage standard change on both and their comprehensive level,expanding and enriching the existing empirical research on the impact of common prosperity.Third,using the finite mixture model,it analyzes the differences,transitions,and causes of the heterogeneity types of the minimum wage standard on common prosperity,providing a reference for various regions to better play the policy effect of the minimum wage standard to promote common prosperity.Finally,the empirical results have the following three policy implications.First,deepen the impact of the minimum wage standard on common prosperity,and effectively play the role of the minimum wage system in"raising the bottom."Second,continuously improve the adjustment system of the minimum wage standard in various regions,improve the scientific and normative formulation of the minimum wage standard,and continuously improve the level of common prosperity in various regions of China.Third,pay attention to the coordinated promotion role of the minimum wage standard and the level of regional modernization.