abstract: 'The ongoing debates on the impact of minimum wage have largely focused

  on the policy''s employment effect for its theoretical implications, but

  the real question at stake here is its income effect, that is, whether

  or not it can increase the income of the underclass. Previous efforts

  have mostly relied on various forms of market imperfection to verify the

  theoretical integrity of this policy, whereas in this article we have

  raised another Marxian perspective, emphasizing the positive check of

  minimum wage on overtime work. Classical economists have long recognized

  the vulnerability of the working class when faced against capitalists,

  but only Marx has paid special attention to the complicated interaction

  between hourly/unit wage rates and the length of the working day,

  proposing that low wage rates would not only hurt workers by forcing

  them to work overtime, but that it would also hurt the capitalists as a

  class once large-scale labor degradation kicks in, endangering the very

  existence of a well-functioning working class for them to employ. Both

  the inherent conflict of interests between individual capitalists and

  capitalists as a class and workers'' systematic disadvantage against

  capital serve to call for the intervention of a ``visible hand{''''} which

  is the establishment of a minimum wage. A theoretical model has been

  proposed to formalize this wage-hour mechanism for the underclass,

  emphasizing the special constraints they face when making labor supply

  decisions. We have discussed three different types of income effect,

  explaining how workers'' income might increase with minimum wage and how

  firms might also benefit from such a process.'
affiliation: 'Xie, FS (Corresponding Author), Renmin Univ China, Sch Econ, Beijing,
  Peoples R China.

  Xie, FS (Corresponding Author), Renmin Univ China, Coinnovat Ctr Econ Construct
  Socialism Chinese Ch, Beijing, Peoples R China.

  Xie, Fusheng; Chen, Ruilin, Renmin Univ China, Sch Econ, Beijing, Peoples R China.

  Xie, Fusheng, Renmin Univ China, Coinnovat Ctr Econ Construct Socialism Chinese
  Ch, Beijing, Peoples R China.'
author: Xie, Fusheng and Chen, Ruilin
author-email: 'xiefusheng@ruc.edu.cn

  crlbelinda@163.com'
author_list:
- family: Xie
  given: Fusheng
- family: Chen
  given: Ruilin
da: '2023-09-28'
doi: 10.13169/worlrevipoliecon.8.4.0503
eissn: 2042-8928
files: []
issn: 2042-891X
journal: WORLD REVIEW OF POLITICAL ECONOMY
keywords: minimum wage; income effect; unconditional quantile regression
keywords-plus: EMPLOYMENT; ECONOMICS; DECOMPOSITION; STATE; MODEL; TIME; BIAS; LAWS
language: English
month: WIN
number: '4'
number-of-cited-references: '65'
orcid-numbers: Chen, Ruilin/0009-0007-8867-3275
pages: 503-541
papis_id: 55c588d6a4ec61dda7bb8112aa10ad03
ref: Xie2017incomeeffect
times-cited: '0'
title: THE INCOME EFFECT OF MINIMUM WAGE FOR THE UNDERCLASS Is It Positive in China?
type: article
unique-id: WOS:000429325400003
usage-count-last-180-days: '0'
usage-count-since-2013: '4'
volume: '8'
web-of-science-categories: Economics
year: '2017'