Keywords: Minimum wages; Compliance
Developing countries are notorious for poor labour market conditions (Ronconi, 2010). Although most developing countries have extensive labour regulations, compliance is generally low (Maloney and Mendez, 2004; Ronconi, 2010; Strobl and Walsh, 2003). There is a growing theoretical and empirical literature on the problem of non-compliance with minimum wage laws in developing countries (Andalon and Pages, 2008; Basu et al., 2010). There is also quite a few papers about compliance with minimum wages in China, for example, Fang and Lin (2013),Yang and Gunderson (2014),Ma and Li (2014), Xie (2010),Sun and Shu (2011),Du and Wang (2008) ,Ye et al.(2015).Almost all of them used the data surveyed at or before year 2009.But from year 2010, almost all provincial governments greatly increase minimum wages. Different from year 1995 to year 2010,minimum wage increases tend to be higher than increases in average wages after year 2010.So the minimum wage/average wage ratio has been increasing gradually from year 2010.Are there any new changes about compliance with minimum wages?
In the empirical literature, a standard way of measuring non-compliance is as the fraction of all covered workers whose wages are below the minimum. However, this measure does not distinguish between different degrees of violation. For example, a wage just below the minimum is counted the same as a wage at one third of the minimum, surely an inexact way to measure a violation of regulation.
In this paper we present a family of violation indices that, by analogy with poverty indices, can emphasize the depth of violation to different degrees. We used CHIPs 2007 and 2013 to examine the extent to which minimum wages are complied with in China. And make a comparison with them.
We found that 3.62 per cent of employees in year 2007 and 7.34 per cent of employees in year 2013 were receiving sub-minimum wages. Overall, there are more workers whose wage below minimum wage in year 2013 than year 2007.When using the relative violation indicators, we found that violated workers earned 26.12 per cent of the minimum in year 2007 and 43.77 per cent of the minimum in year 2013.Violated workers got higher wages in year 2013, compared to year 2007.They became better. It is interesting. The results imply that both the level and the depth of violation are important when quantifying violation. Workers worse off in terms of the absolute violation measure may not necessarily be equally worse off in relative terms and vice versa. It suggests that both an absolute and a relative measure of violation matter when examining minimum wage compliance.
In comparing wages to minimum wages, the regulations make it clear the wage should exclude overtime pay. When we consider weekly working hours, the proportion of violated workers increased a lot.13.95 per cent of employees in year 2007 and 12.95 per cent of employees in year 2013 were receiving sub-minimum wages. What is interesting is that the proportion of violated workers almost did change or even decreased from year 2007 to year 2013 when considering working hours. This is because working hours of low-skill workers decreased a lot from year 2007 to year 2013.
地址：北京市海淀区新街口外大街19号 北京师范大学北主楼1715、1716室 邮编：100875
Copyright © 2012 China Institute For Income Distribution. All Rights Reserved
Address: Room 1715-1716 In The North Main Building In BNU, No. 19 Xin Jie kou Wai Da Jie Street Beijing 100875.