Govt has to narrow income gap

The 2011 China Salary Development Report, released by the Ministry of Human Resources and Social Security, shows that the income of some industries is very high, which is widening the income gap. The income distribution reform cannot be delayed, because it is important to optimize economic growth and transform the social structure, says an article in Beijing Times. Excerpts:

The salary report shows that the income gap, especially between monopoly industries and common competitive industries, has widened. The income gap has also widened between corporate executives and general employees. Some people's annual income is reportedly 10 times that of the local average. Some other executives earn 2,000 times more than the urban national average income, and 4,000 times more than the wages of an average migrant worker.

Such a huge income gap is disturbing. Although a reasonable income gap is normal in market economy, because individuals and corporations contribute differently to economic growth, it should not be as wide as seen in our society.

The most worrying aspect of the income gap is the imbalanced allocation of resources. For example, some industries and companies enjoy a much higher income because they are monopolies or dominate the market. We need to build a mechanism to supervise and control "privileges". The income gap has a negative impact on the economy and its widening trend inhibits consumption.

The government should take specific measures to narrow the widening income gap by limiting the resources of monopoly companies to create a truly competitive market. It also has to take care of the middle- and low-income families with subsidies and lower taxes.

(China Daily 10/23/2012 page9)