In this assignment, we will analysis what is the benefit of minimum wages. For instance, according to last month, a city in China raised its level of minimum wages, as a result of which those people can easily get their necessities of life as compared to before. At the same time, people can use extra money to take care of themselves and their families (Quartz, N.D). Also, in China’s law, workers working on minimum wage are not required to pay tax to the government. This is a setback to those people who work hard; at the same time, some unemployed people would like to get back to the market in search of new job and rise above the minimum wage level. China has made substantial adjustments in the levels of minimum wages and has decided that they are dependent on some laws (such as <advice service work of migrant workers> and <Corporate downsizing provisions>) which were released in recent years. It must be noted that China is one of the biggest developing country and cost of living is rising very fast. Thus, change in minimum wages can ensure people to maintain the basic needs of their life. According to the state-run Xinhua News agency “where fewer new workers are entering the labor force” local governments are dealing with labor shortages. (Xinhua News Agency) On the basis of the increased minimum wages, China aims to change its structure, this would help the companies to hire more high-value person which would replace the cheap labor and get better product and service.
This graph below shows how minimum wages have changed in the last two years in some main cities of China (CBS Interactive). As we can see, from the year 2012, minimum wages started to increase, and as a result of the same, different industries also started to increase the minimum wage by different degree. Due to a rapid rise in the inflation rate, these years in China, the government should take decision of increasing the worker’s minimum wages as well (Quartz, N.D). This would result in making more workers happy and create more value in industries or countries, and at the same time, it would increase the overall productivity in the economy.