Empirical study on minimum wage level in China: The ELES approach

In this paper, an attempt is made to determine the minimum living requirements (or poverty lines) of workers in China by adopting the Extended Linear Expenditure System. Comparison between the actual minimum wage levels implemented by the Chinese government and the estimated minimum living requirements in this paper reveal that, in early 2010, workers in 23 out of 35 sample cities were paid minimum wages below the estimated lowest poverty line. This group of workers is unable to afford minimum payments to meet basic living conditions for survival as their minimum wages were below the estimated survival line. To protect workers, the Chinese government is advised to address employee provisions for basic living needs.