The Labor Supply and China Economics Term Paper

The Labor Supply and China Economics - Term Paper Example This paper will discuss labor supply in China. It will highlight the concept of wages and employment in the Chinese economy and the outcomes of human resource development. Discussion Wages and Employment in the Chinese Economy The economic transitions that China has experienced in recent years are characterized by the adjustment of wage and employment by private enterprises in order to maximize profits. The government controls the wages and employment of the enterprises that are owned by the state. This is in an attempt to improve the quality of the income for the workers and to curb inflation. The government achieves this through setting a wage ceiling for each enterprise. The wages of the enterprises that are better performing are regulated strictly (Chow 53). Despite the strict regulation of the wages and employment for these enterprises in China, the firms have some influence on the wage and employment. The determination of wage and employment is like a bargaining process with th e social security and labor bureau playing a huge role. In the process, the government aims to lower wage and higher employment while the enterprises aim at reaching huge profits (Chow 53). Collective Bargaining and Its Effects on the Wages and Employment Collective bargaining has been used in many economies as a means of regulating wages and employment conditions. This instrument has been used in China to address the issue of decreasing labor supply, which needs immediate attention. It has become the most important source of strategies for the regulation of conditions relating to wages and employment in countries such as China. The coverage of the bargaining agreements is very high in China with the public sector witnessing the coverage of all the wage earners in all jobs. The private sector has a lower coverage of the collective agreements with this coverage varying significantly between various branches and employee categories. The corrective bargaining agreements contain compreh ensive regulations for the relationship of the employment with the inclusion of aspects that are regulated in other countries through the constitution or various statutes. Trade unions are of great importance in the achievement of the collective bargaining agreements as their importance is not limited to the establishment of conditions in the employment and wage sectors but they are also important in application and supervision of law in the firms. Employees are unlikely to realize their contractual rights in the absence of support from the trade unions (Li and Zax 3). In China, the collective bargaining agreements became the main form of regulation for wages and employment in the 20th century with the first agreements offering price lists for various kinds of work. These agreements became more comprehensive later as they encompassed rules that not only included time but also work rules, work time, freedom of association and peace obligations. The collective bargaining agreements we re at first concluded at the local basis, which covered limited enterprises. During this period, the collective bargaining concept had not been integrated into China’s legal system. Henceforth, individuals were not aware of the legal status and effects of such agreements (Ni, Wang and Yao 19). Macroeconomic Outcomes of Human Resource Development