What should be the current level of labor wages or annual income in our country? So far, no one has conducted a macroeconomic analysis. As a result, last year there was widespread public anger surrounding the issue of meter readers earning 100,000 yuan per year. This was an irrational reaction. Given the current state of economic development in our country, there needs to be a detailed analysis of what the appropriate level of labor wages should be.
Judging from the current level of economic development in our country, an annual income of 100,000 yuan is no longer an unattainably high standard. This has been calculated precisely. The problem lies in the enormous income disparity in our country, which has led to low wages for ordinary enterprise employees. This situation must be broken by political forces. However, prior to that, the public opinion sphere needs to have a clear and in-depth understanding.
I. Wage levels viewed from the perspective of our country's economic development
Firstly, don't be overly surprised by an annual salary of 100,000 yuan. This is where state-owned monopolistic enterprises have an advantage over private enterprises in some respects. In fact, the real goal should be to align with a wage level of 100,000 yuan, to enhance the political status of Chinese workers, and to safeguard their labor rights and economic benefits.
Currently, the average labor cost per person in 12 central enterprises is between 60,000 and 70,000 yuan, which is 3 to 4 times the national average wage level. Consequently, these central enterprises have become targets of public criticism. With labor costs ranging from 60,000 to 70,000 yuan, the average monthly income is around 5,000 yuan. If this is 3.5 times the national average wage level, then the national average monthly wage level would be 1,400 yuan. Is this income level too high or too low for the vast majority of salaried workers in our country? Let us assess it from the perspective of Gross Domestic Product (GDP).
In developed Western countries, wages generally account for 50-60% of GDP. In 2005, China's Gross Domestic Product was 19 trillion yuan, but the total wage bill for employees that year was only 1,998.08 billion yuan, accounting for only 11% of that year's GDP. Of this, state-owned economic units accounted for 1,200.92 billion yuan, urban collective economic units accounted for 86.78 billion yuan, and other economic units accounted for 710.38 billion yuan. This ratio clearly shows how low China's wage levels are!
In 2005, the total number of employed people in urban areas in our country was 273.31 million. The number of employees in state-owned units, collective units, shareholding cooperative units, joint venture units, limited liability companies, joint stock companies, private enterprises, Hong Kong-Macao-Taiwan business investment units, and foreign-invested units were respectively 64.88 million, 8.1 million, 1.88 million, 0.45 million, 17.5 million, 6.99 million, 34.58 million, 5.57 million, and 6.88 million. There were also 27.78 million individual businesses. That year, the average monetary wage for employees in our country was 18,405 yuan. If we consider all 273 million employed individuals as wage earners, their total wage income should be 5 trillion yuan, accounting for about 25% of the 20 trillion yuan GDP in 2006. This result includes individual businesses in the statistics. If China's wage income were to rise to 40% of GDP, at 8 trillion yuan divided among 200 million employed individuals (among the 270 million urban employed population, there are a large number of unemployed and non-standard employment individuals, and those with actual wage incomes are less than 200 million), the per capita annual income would reach 40,000 to 50,000 yuan. This should be the reasonable share of labor wages in our country.
Due to differences in income distribution and wage grades, if we use the national average wage level of 40,000 yuan as a benchmark, the wage level for middle-income workers should be around 70,000 to 80,000 yuan. Therefore, some employees earning 100,000 yuan is not such an extraordinary thing.
However, in 2005, the total wage bill for employees in our country was only 1,998.08 billion yuan, accounting for only 11% of that year's GDP. This income level is indeed too low. It's no wonder that some scholars exclaimed: China is destroying the moral ethical baseline of capitalism! This means that even during the most brutal early stages of capitalist development in Western countries, wage levels were not this low!
II. Where has the national income gone?
From the perspective of macroeconomic data, currently, the government takes approximately 35% of the Gross National Product, corporate capital takes approximately 45%, and farmers and urban workers take the remaining approximate 20%. This is an extremely unreasonable income distribution structure.