What is a Prevailing Wage?

The average wage is an indicator that reflects the overall level of wages. It refers to the average amount of monetary wages received by employees of enterprises, institutions, and institutions within a certain period of time. It differs from the specific salary level of each individual.

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Average wage refers to the average income per employee of enterprises, institutions, and institutions within a certain period of time.

On the issue of wages, ordinary people are increasingly feeling the word "average". From a purely theoretical perspective, it is necessary and desirable to use the "average number" to express changes in the wealth level of residents. However, if it is connected with real life and combined with the current social situation, then the "average" is likely to be difficult to objectively reflect the current social situation and reflect the true living standards of the masses.

In a society

Highest average salary

The staff members of government agencies have received the highest benefits in the past year, reflecting how the past tide of the sea has become the current tide of entering the government.

The various negative effects brought about by this, in the lingering shadow of the global financial crisis and the increasingly prominent and sensitive unemployment problem, the work of the government to protect the drought and floods has made the whole society more enthusiastic and heart-warming. Up things. The negative effect of the highest average salary of the government agencies is obvious, and it should be vigilant.

White-collar salary gap widens

In April 2014,

Bottom voice of average salary

Beijing announced that the average wage of the city's employees in 2014 was 77560 yuan, and the monthly average wage was 6,463 yuan. A large number of netizens have complained that they have been "averaged" and "obstructed." It is not enough to take the average wage to reflect the general income situation in the society. It is a flicker to show people the average wage year after year. Since the social security base and the housing provident fund payment base are determined by the average wage, this has in fact caused the effects of making the low-income people poorer and robbing the poor, and this situation should be changed.

Average salary

"The Zhang family has ten million yuan. Nine neighbors are poor. On average, all of them are Zhang million."

When the Bureau of Statistics announced the average salary, this oil poem was destined to be repeatedly mentioned by netizens. The "Statistical Bureau data" in 2015 was more impressive than in previous years: the average national salary in 2014 was 49,900, and the monthly average was 4,000 yuan. In his early days, the average salary in Beijing, the capital, reached 77560 yuan, and the monthly average salary was 6,463 yuan, which is very enviable; the average annual salary of employed persons in urban non-private units in the city was 102,268 yuan, and the monthly average reached 8522 yuan.

Some people lament that they are "averaged," while others find the data tricky-how could the average be so high? Compared with the 2013 Beijing urban residents' per capita disposable income announced at the beginning of the year, 43910 yuan, of which wage income was 33,044 yuan, the average salary of 77560 yuan is not easy to understand. In fact, it can be explained that the average salary refers to the pre-tax salary, which includes not only the tax, but also the individual contributions of the social security and provident fund withheld by the unit, while the disposable income and wage income in the household survey refer to the available The total denominator of the average salary is only the employees who are currently employed, and the denominator of the wage income includes all people, such as the elderly and children. The total number of employees in Beijing is about 7 million. No, the total urban population is about 18 million. In terms of conversion, average wages and per capita wage income are roughly equal.

There is really no problem with the data, then there is only one reason why the feeling of being "averaged" and "sufficient" is so strong: high-income earners have too high wages. There are many large state-owned enterprises, famous foreign enterprises, and private enterprises in Beijing. The absolute number of high-tech talents and management talents is also relatively large. Multiplying by a large salary, naturally, the average salary has been dragged up significantly. As the oil poem says, "Everyone counts, every one is Zhang million."

The "skewed distribution" of wage income makes most people "average"

The problem is here. The high salary of a few people can greatly increase the average wage. This is the current state of distribution in China. What is the significance of such an average wage to the majority of the working class? To reflect the wages of most people, the data that should be published is the median, that is, the 7 million workers in Beijing are counted in descending order of salary. The salary of the 3.5 millionth worker can only reflect the general society. Or announce the mode, divide different amounts of wages into intervals, and see which interval has the largest number of workers, which can reflect the general wage situation. Either way, it makes more sense than "average wages."

Average salary

As for the average salary, people will feel "averaged" and "sufficient." The National Bureau of Statistics and the local statistical bureaus are psychologically prepared. The interpretation of the distribution of each time the data is basically explained, the interpretation of the Beijing Statistical Bureau said "" Because the distribution of wages is a typical skewed distribution, that is, the wages of a few people are higher, and the wages of most people are lower, so the wages of most people will be lower than the average salary ... At the same time, due to many factors, the wage level exists objectively There is a big difference, and everyone feels differently about average wage growth. "

As early as 2009, Feng Nailin, director of the Department of Population and Employment Statistics of the National Bureau of Statistics, admitted in an interview that it was not appropriate to publish the average wage. "The biggest problem in our statistics is that we can't count the average wage now. Reflecting the differences ... A common feeling is that the "average wage" masks the larger differences in wage distribution, or inequality. "" There are three averages, medians, and modes. " The value can represent this average amount. In addition to the average number, being able to publish 'median wage level' or 'moderate wage level' may be easier for the public to understand. "

So why only publish the mean and not the median and mode? Feng Nailin explained at the time, "The algorithm of wage statistics is to compare the total wages with the number of employees, that is, the average wage obtained by dividing the total wages by the number of employees. At present, we have no more detailed methods of counting wages from other channels. , So now only the average salary is published. "" If you want to calculate those two numbers (median and mode), you need to calculate the salary of each person in each unit, so it may be more difficult ... The current conditions are not Allow us to do these two values, so we can only use the average. "

Six years have passed, and no statistical office has overcome the difficulties and created the conditions, and still only publishes the average salary.

Average wage in Hong Kong

Is it so difficult to publish the median and mode, it is doubtful. Take Hong Kong, China as a comparison. The Hong Kong Census and Statistics Department conducts an "annual survey of income and working hours" every year. It is published on time every year. It not only has a press release, but also publishes a detailed 120-page pdf file with detailed contents. The salary distribution of all employees in Hong Kong includes not only the median, but also more detailed percentiles. It ranks the salaries of employees in Hong Kong from low to high, telling you that the person at the 10% position has a monthly salary of 8000 in 2014. Hong Kong dollars, the monthly salary of a person in the 25% position is 10,500 Hong Kong dollars, in the 50% position (that is, the median) is 14,800 Hong Kong dollars, in the 90% position is 37,600 Hong Kong dollars, etc. Such clear data are very meaningful Allows people with different incomes to find their own position. This report also includes data from all walks of life, as well as ranking the number of people in each section by hourly wages (from which the mode can be calculated), which are useful.

How did the Hong Kong Government conduct this survey? The first is to formulate a law, make this survey a compulsory survey, and then government statisticians sample about 10,000 units in a certain month of each year, and then draw this report. It is mainly strength and energy, and there is nothing special about the method. So why does the Hong Kong government spend this effort? The Hong Kong government also said very clearly, "The purpose of this survey is to provide comprehensive data on the wage levels and distribution of Hong Kong employees, employment conditions and demographic characteristics. These statistics are useful to the private sector and the government on various labor-related issues. It is very useful when conducting research on related topics. The figures are also important information for carrying out analyses related to the legal minimum wage. "

It is very useful for research on labor-related topics and is an important reference for policy formulation, so we must do this work. Can the Statistics Bureau in the Mainland learn?

Social Security Base

"Based on average wages" is an accomplice to the skyrocketing social security contribution base

The most important purpose of publishing average wages in mainland China is to formulate policies. For example, when the Beijing Municipal Bureau of Human Resources and Social Security announces new average wages, it immediately issues a notice, "Everything that is calculated based on the average wages of the entire city in 2014. , All in accordance with this notification standard. "

What matters need to be implemented according to the standard of average wages? Generally, there are several: 1. The reference basis for the relevant departments to formulate the standards for collecting social security benefits, such as: five insurances and one benefit, security for disabled employees, minimum living security standards for urban residents, and preferential treatment and relief standards. 2. The relevant departments shall formulate the amount of basic pensions and retirement benefits and the reference basis for the local minimum wage standards. 3. The national judicial department determines the reference basis for judicial compensation for personal injury. 4. Industry data participate in national economic statistics.

For most people, the most important thing is that the average salary is a reference standard for "five insurances and one fund", which is used to increase fees for relevant departments. However, this has a considerable impact on people's livelihood. We have discussed this issue in "Social Security Payments Base Rise: The Poor Overwhelmed". The Interim Measures for the Management of Individual Accounts for Employees' Basic Endowment Insurance (Lao Ban Fa [1997] No. 116) has a provision: If the average monthly salary of the employee is less than 60% of the average salary of the local employee, 60% of the average monthly salary of the local employee (as a Base) payment. This rule determines that for low-income people, the greater the gap between their wages and the local average wage, the higher their social security costs and the less money they have left. Now that the average wage is being rushed by high-income earners all the way, can the social security payment base not soar? Can't the burden of low-income people increase?

Housing provident fund payment standards are also related to average wages, which is good for high-income earners. There is an upper limit for the payment of the provident fund, which is three times the local average salary. The current operating status of the provident fund is that the more high-income earners pay, the more beneficial it is. One reason is that the part paid by the unit will increase accordingly and will eventually be returned to the individual. The second reason is that only people who can afford a house can afford it. Only people can use the provident fund loans. Facts also prove that most provident fund loans are issued to high-income people. The current housing provident fund is actually a policy of "robbing the poor and helping the rich". The average wage has skyrocketed year by year, and naturally it has become an accomplice in plundering the poor and helping the rich.

Strict procedures for average wages

The question here is, why should the average social wage be used as a reference for social security and provident fund payment bases? Considering the severe situation of income distribution, this approach is very flawed. If the median and mode are used as a reference, the burden on low-income people will inevitably be reduced, which is a more reasonable approach. In fact, in Hong Kong's "compulsory provident fund" for similar social security projects, the "minimum relevant income" (similar to the minimum payment standard) takes into account the median and percentiles of the wage distribution, not the average wage.

For low-income people, the social security fees paid are hard-earned money, and they are not willing to easily hand it over to the country. As insurance costs, they will be refunded later, but the disposable funds at hand are very low-income people. Importantly, how much should be reserved for low-income people, how can it be determined by a "social average wage" that has been rising year after year, and the burden on low-income people is increased every year? There must be strict procedures for "cutting" any point of income from workers, and they cannot be determined at will. If the "minimum relevant income" of the aforementioned "compulsory provident fund" in Hong Kong is to be amended, it must be fully discussed by the parliament, and it must not affect people's livelihood. Relevant departments should follow this approach. ^[13]