[Abstract] Since the end of the 90's, due to the relative slowdown in economic growth, the adjustment of the economic structure has been gradually accelerated, and the reform of state-owned enterprises has begun to enter the stage of attack, which has led to an increase in the number of laid-off people, increasing employment pressure, and the income gap has become a hot and sensitive topic of concern. The authors believe that the reasons for the widening of the income gap among residents include: differences in personal qualities; the impact of market competition; the income gap between new and traditional industries, which has a certain degree of reasonableness; and the disparity between the basis for development and natural endowments. However, the widening of the income gap or the discontent of the general public is caused more by unreasonable factors. Among them are the existence of a large number of various kinds of illegal income; the more prominent monopoly problem; the influence of policy factors; redistributive capacity is insufficient and other factors.

Since the end of the 90's, due to the relative slowdown in the rate of economic growth, the adjustment of the economic structure gradually accelerated, the reform of state-owned enterprises began to enter a stage of attack, thus leading to an increase in the number of laid-off people, employment pressure is increasing, the income gap has become a hot issue of concern and a sensitive topic. So, how big is the income gap among residents? What is the impact? What countermeasures should we take? These issues have not only become the focus of general concern of the people, but also caused a deep dialogue in the economic community.

I. Analysis of the performance of the residents' income gap

Since the reform and opening up, China's income distribution system and the scale of income distribution has undergone great changes. With the deepening of the reform of the economic system, the level of residents' income has been rising: in 2000, the per capita disposable income of urban residents was 6,280 yuan, 18.3 times that of 1978, excluding price factors, the per capita disposable income of urban residents in 2000 was 3.84 times that of 1978; in 2000, the per capita net income of rural residents was 2,253 yuan, 16.9 times that of 1978 In 2000, excluding price factors, the per capita net income of rural residents was 4.83 times that of 1978. At the same time, the widening of the gap between residents' personal incomes has been relatively rapid, and the overall widening has been recognized by all sectors of society. Its specific manifestations and characteristics are:

1. The income gap between urban residents is still within a reasonable range. According to calculations made by the relevant departments of the National Bureau of Statistics on the basis of annual data from the recurrent survey of urban residents, the Gini coefficient for urban residents was 0.16 in 1978, and rose to 0.295 in 1999, an increase of 13.5 percentage points. In terms of the stages of its development, from 1978 to 1984 the income gap was very small, and the Gini coefficient remained virtually unchanged; from 1985 to 1994 the income of urban residents grew at a high rate, and the income gap widened rapidly, with the Gini coefficient reaching 0.3 in 1994; and from 1995 to 2000, when the growth in the income of urban residents slowed, the Gini coefficient appeared to languish, with little change. In terms of this statistical data, the overall level of Gini coefficient of urban residents' income in China is lower than that of the United States, and it is at a medium level in comparison with the international level. However, there is a big difference between this and our daily feelings, which is mainly due to the fact that there are cases of underreporting of the income of residents with high income levels. For example, in the third quarter of 1999, the National Bureau of Statistics (NBS), in conjunction with the relevant departments, conducted a survey on the basic situation of 150,000 urban residents, and the Gini coefficient calculated on a per capita basis for the month of August 1999 amounted to 0.354, which is significantly higher than 0.295. In addition, as a result of the persistent disparity of income, the possession of wealth among the resident families is more obvious, and according to the data provided by a survey report of the NBS, in the cities, as of 1999, there was no significant difference in the income of the residents. data, in urban areas, as of the end of June 1999, the 20% of urban households with the largest amount of financial assets owned 55.4% of all urban residents' financial assets, while the lowest 20% of households owned only 1.5% of all financial assets. Other surveys have reported even greater disparities. Therefore, although from the current statistics we can draw the basic conclusion that the income gap between urban residents is still within a reasonable range, we should also note that the actual Gini coefficient is higher than this number, and it is necessary to pay attention to it.

2. The income gap between rural residents is slightly wider than that between urban residents, but the growth rate is not as fast as that in towns. According to the calculations of the people concerned, the Gini coefficient for rural residents was 0.21 in 1978 and reached 0.34 in 1998, an increase of 13 percentage points, with the absolute level higher than that of the towns and the growth rate slower than that of the towns.

3. The income gap between urban and rural areas is even more pronounced. According to the World Bank's calculations, China's national Gini coefficient was 0.3 in 1978, 0.382 in 1988, and 0.445 in 1995, which has exceeded the internationally recognized level of moderate inequality. According to information on the urban and rural combined quintiles calculated by the relevant authorities in 1994, the richest 20 per cent of households accounted for 50.24 per cent of all income, while the poorest 20 per cent accounted for only 4.27 per cent, which is close to or equivalent to the level in the United States. Regardless of the possibility that the income level of rural residents is overestimated while that of urban residents is relatively conservative, the ratio of urban to rural incomes in 2000 was 2.79:1, a level second only to the highest since the reform and opening up of China, which was 2.86:1 in 1994, and since a considerable portion of rural residents' incomes are intended to be used as productive inputs for the following year, the disparity between the incomes of urban and rural residents is actually even more pronounced. In terms of international comparisons, China's current urban-rural income ratio has already exceeded the level of the urban-rural gap in the vast majority of countries and regions in the world. It can be said that the urban-rural income gap is the biggest problem faced in the field of income distribution in China, and is also an urgent problem in China's economic development.

4. The regional gap is very obvious. At present, whether within the urban residents, or rural residents, the income gap between different regions is very obvious. From the situation within the towns and cities, the three municipalities directly under the central government and Guangdong, Zhejiang and other coastal provinces and regions is significantly higher than the central and western regions, such as the highest average income level of Shanghai is the lowest income level of Shanxi Province, 2.52 times. Looking at the situation within the countryside, because of the generally lower income levels of rural residents, there are even greater differences in development across the region, and their income disparities are even greater. For example, in 1999, the per capita income in Shanghai, the city with the highest income, was 5,409 yuan, and outside the three municipalities directly under the central government, the per capita income in Zhejiang, the city with the highest income, was 3,948 yuan, or 4.13 and 3.02 times that of the Tibet Autonomous Region, which had the lowest level of income, respectively. This disparity will be even more pronounced if we break it down into regions. Judging from the preliminary data we have on countries around the world, our regional disparities are among the highest in the world.

5, the gap between industries further widened. 1990, the highest-income industries and the lowest-income industries income ratio of 1.3:1, rose to 2.6:1 in 1999, 1990, the three highest-income industries are: extractive industries, scientific research and technology, and geology and water conservancy, the lowest income of the three industries are: manufacturing, agriculture, forestry, animal husbandry and fishery, and commercial food and beverage; in 1999, the three highest income In 1999, the three highest-income industries became: real estate, finance and insurance, and scientific research and technology, while the three lowest-income industries became: commercial catering, social services and extractive industries. And this gap is not related to the education level and ability of the practitioners, but is entirely determined by the nature of the industry.

6. Out-of-wage income has become the main factor in widening the income gap. According to the survey data of the relevant departments, at present, the wage income of China's urban residents is still an important source of family income, accounting for about 45% of the total income, and contributing to about 40% of the total gap, except for 5% of the high-income group, other income groups accounted for the proportion of wage income is higher than or equal to its proportion in the total income, indicating that wage income has been playing a role in making income equalization. However, we note that extra-wage income has accounted for about 55% of total income, contributing nearly about 60% to the total gap, exceeding the contribution of wage income, indicating that the inequality of extra-wage income is a major factor in the formation of the overall gap. Of course, off-wage income is more largely concentrated in the high-income group, accounting for a significantly higher proportion than other groups.

In addition, the disparity in residents' income is also reflected in gender, age, education level, type of enterprise and ownership differences, etc.

The reasons for the widening of the income gap

We believe that the reasons for the widening of the income gap are both reasonable and unreasonable. In terms of reasonable factors, there are mainly:

1. Differences in personal qualities. In the market economy, the size of the individual ability is directly proportional to the relationship with the income, the stronger the ability, the higher the income, which is in line with the law of economic development, and only in this way, can fully mobilize people's subjective initiative, to stimulate the enthusiasm of its innovative and enterprising. At present, especially in the late 90's, high income earners more and more appear with reasonable knowledge structure, good professionalism, the ability to find opportunities and the courage to grasp the opportunity, good interpersonal relations with the ability to deal with excellent quality of high-quality people. It should be said that the formation of personal income disparity arising from this is reasonable.

2. The impact of market competition. After more than 20 years of reform, China's economic system has undergone fundamental changes, the framework of the socialist market economic system has been basically determined, the market has become the most important force in the allocation of resources. In the field of income distribution, the market mechanism has basically replaced the traditional planned approach, and has basically formed a system of income distribution system in which distribution according to labor is the mainstay, and various factors of production*** participate in the same distribution. Therefore, in the process of market competition, the formation and widening of the income gap between different members of society and different economic organizations is inevitable, due to differences in their competitive abilities, labour contributions and factor inputs. The formation of income disparity by competition, especially in the field of primary distribution is the inevitable result of economic marketization.

3. The income gap between new and traditional industries is also reasonable. We note that in recent years, due to the decline in the competitiveness of traditional industries, coupled with the narrow market space, the level of income has not increased quickly. On the other hand, those new industries, such as the IT industry, are developing rapidly and the income level of their employees is relatively high. In fact, this is also due to market competition, profitability of the size of the difference, is a worldwide trend, with a certain degree of reasonableness.

4. The gap between development base and natural endowment. Between different regions, whether it is different areas of urban or rural areas, in the geographical location, natural conditions, economic base and the possession of a variety of resources in the differences are extremely prominent, these differences in the starting point of a large impact on the results of competition is obvious. Both the gap in economic development and the gap in population income have in fact been broadly defined from the outset. Moreover, the disparities in basic conditions and incomes between urban and rural areas and between regions usually create a strong "Matthew effect", with the more developed places having a greater ability to gather resources, greater development potential and higher incomes, while the opposite is true for places with poor basic conditions. In this case, if there are no special factors, the gradual widening of the gap is inevitable. It should be said, due to the development of the foundation, natural endowment and other disparities caused by the difference in the starting point of competition in any country and society will prevail, for a large unbalanced country such as our country is even more so, which has its own certain inherent laws.

However, the widening of the income gap or the public discontent caused by more unreasonable factors, specifically:

1. the existence of a large number of various kinds of illegal income. since the 1990s, the use of power for private gain, power and money transactions are rapidly expanding the extent and scope. From the main links, from the distribution of funds and materials to the land lease transfer, construction contracting, product purchase and sale and collective consumption (kickbacks) and other links, and is now being extended to the change of property rights in state-owned enterprises. From the point of view of the sectors in which power and money transactions take place, they have been extended from economic management to law enforcement departments such as industry and commerce, taxation, customs and public security, as well as to social services such as culture, education and health, and have even begun to infiltrate the political sphere, such as organization and propaganda. The existence of large amounts of illegal income has exacerbated the gap in income distribution in society. According to estimates by the relevant authorities, there is currently no shortage of multi-millionaires and billionaires in China. What deserves special attention is the current serious problem of tax evasion and leakage throughout the country. Relevant experts pointed out that China's various types of economic organizations and individuals on the illegal interception of national tax revenues are: 40% of the state-owned economy, 50% of the township economy, the individual economy for 70-80%, resulting in the loss of our tax revenue totaling at least 100 billion yuan a year, of which about 30 billion yuan from the loss of the individual households. All these illegal incomes have created a group of high-income classes, thus increasing the polarization of society. At present, the most strongly reflected by society and probably the most prominent impact on income inequality is the use of power to make ill-gotten gains from corruption, which is fully illustrated by a number of major cases investigated and dealt with in recent years and the huge illegal gains of millions or tens of millions of dollars of the people involved in the cases, although it is not possible to accurately estimate the role of corruption and other unlawful factors in exacerbating income inequality, but taking into account the general public discontent and the large number of media reports. Although it is not possible to accurately estimate the role of illicit factors such as corruption in exacerbating income inequality, given the widespread public discontent and the large number of cases reflected in the media and elsewhere, it is safe to assume that the problem is already serious. This may be the main reason why many of the current statistical results on distribution are inconsistent with the public perception, and why it is even difficult to explain the huge consumption gap in real life.

2. The problem of monopolization is more prominent. Monopoly, has been a persistent problem in the process of marketization of China's economy, and its main manifestation is that some sectors or industries or even some individual members of society, or through various ways to implement market entry restrictions, exclude or even combat other competitors, monopoly; or control, manipulate the market price in order to obtain excessive profits; or the use of asymmetric information, that is, the monopoly of information to carry out unfair trade or even speculation. What is fundamentally different between this kind of monopoly and the traditional state monopoly system is that the monopoly benefits cannot be centralized to the state, but the vast majority of them are transformed into the interests of small groups of the industry or sector itself, and are highlighted by the unreasonable widening of the income gap between the employees of these industries or sectors and other groups. In other words, by taking advantage of unfair competition such as monopolization, certain groups can obtain very high returns with little input. The role of monopoly and other unequal competition is quite prominent in the current income gap between industries and the income gap between sectors and units.

3. The influence of policy factors. From the regional income gap, although the gap between regions and the natural environment, geographical location and with the past investment system in infrastructure, key projects and other areas. At the same time, it is also related to the order in which reform and opening-up were promoted and the differential policies in the development process, that is to say, some policies since the reform have exacerbated the widening of regional disparities. In terms of the situation of individual residents, at the beginning of the reform and opening-up period, supported by the policy of "allowing some people to get rich first," the incomes of China's urban residents increased dramatically, while at the same time, the income gap between urban residents also continued to rise, but the high income earners at that time were neither government officials, nor business managers, nor professional and technical personnel. Rather, they were unemployed and jobless people engaged in simple commodity trading. This is of course closely related to the historical background and the stage of development of our country at that time, but it cannot but be said that it is also related to the policy system at that time.

4. Insufficient redistributive capacity. The use of transfer payments and other means to implement redistribution, is the basic means to alleviate the income distribution gap, but also the basic responsibility of the government. But from the reality of the situation, the various redistributive means and not be able to play its due efficacy, failed to market competition and non-market factors intervene in the formation of the distribution gap to form an effective adjustment, in some areas and even further exacerbate the income gap. Specifically: (1) the regulation of the high-income class is not effective, taxation, especially personal income tax is not ideal: First, the personal income tax revenue is not ideal, and in some areas, the actual tax burden of low-income groups is higher than that of the high-income groups, the more typical is the difference between the peasants and the urban residents. (2) The protection of the low-income class is not strong enough. (3) Some of the formation of the transfer payment system is tilted in favor of high-income groups, which is highlighted in the health care, housing and other welfare system, such as many benefits are basically only provided to urban residents, while the overall low income of rural residents can not enjoy.

Three, the impact of a large income gap

It is undeniable that the existence of a certain income gap is conducive to stimulate the residents of the spirit of upward mobility, positive struggle, for the development of the national economy is good, which can be seen from the previous system of China's pot rice and break the pot rice after the comparison. However, the excessive income gap and the existence of unfair distribution will also lead to a series of problems.

1. It affects the effective growth of domestic demand. If the income gap is too large to the extent that there is a trend of polarization, and the emergence of such a gap is mainly due to unfair circumstances or illegal means, it will depress the production enthusiasm of the general working masses and cause damage to the development of the national economy. This is because production determines distribution, and distribution in turn plays an opposite role to production. If the distribution is reasonable, with the increase of people's income, it will improve the consumption ability, pull the market demand, and promote economic growth. On the contrary, if the income gap is too large, a large amount of money concentrated in the hands of a small number of rich people, the majority of working-class people's purchasing power can not be increased accordingly, the formation of "rich people do not buy things, want to buy things without money" phenomenon, the overall level of consumption in society will inevitably decline, and at the same time, the formation of new points of economic growth and the development of pillar industries will be subject to a certain degree of inhibition, which in turn will make the investment and development of the economy. The formation of new economic growth points and the development of pillar industries will also be subject to a certain degree of inhibition, which in turn will lead to a decline in the demand for investment and have an adverse impact on the growth of domestic effective demand. In recent years, China has adopted a series of policies and measures to expand domestic demand, and has also achieved certain results, but not as good as we had hoped, in addition to the international environment and the stage of development of certain changes in the reasons, another important reason is that the low-income class income level, especially the income level of the rural population has grown slowly, and even in some places there is a decline in income level, which affects the growth of its consumption demand, the future expectations have a negative impact on the Future expectations have an adverse impact, making the policy of expanding domestic demand can not achieve the desired results.

2. Adverse impact on social stability and social atmosphere. Excessive gap in social income distribution will also have a serious negative impact on social and political life, affecting the healthy social climate and social stability. As the social welfare of the general public decreases and their income level is low, their mentality will change to a certain extent, and some of them may even take the risk of committing crimes, thus jeopardizing social stability and causing certain impact on social stability. Especially due to the emergence of a large number of unfair income distribution phenomenon, the masses have strong dissatisfaction, affecting their participation in the reform and opening up and economic construction, and even the trust in the government will decline, so that the implementation of policies and measures in practice will be discounted. Moreover, this unstable mood is highly contagious and will make the stability of the whole society and the formation of a good social climate have a great adverse impact.

Therefore, the problem of unfair income distribution and excessive income disparity must not be underestimated, it is not only a problem in the field of income distribution, but also a major problem affecting economic development and social stability.

Four, the understanding of the problem of income disparity and thinking

From the above analysis, it can be seen that at present, China's residents income gap problem has been more prominent, which has both reasonable factors, there are unreasonable factors, at the same time, the excessive income gap on the economic development will also have a negative impact on how to look at this problem?

1. The pursuit of efficiency and equity should remain the keynote of income distribution policy for a period of time in the future. Nobel laureate Kuznets through the income distribution of a number of countries to conduct statistical analysis, put forward the "inverted U-shaped" hypothesis, that is, the inequality of income distribution in a country will deteriorate with the early economic development, and after reaching the highest, and with the late economic development and improvement, and at the same time concluded that the per capita national income of 300 -500 dollars, the inequality of income distribution reaches its highest level. At present, China's per capita GDP has already reached 800 USD, exceeding the apex of the "inverted U-shape", and some experts believe that the income distribution policy should be adjusted to emphasize more on the issue of fairness. However, in the author's opinion, Kuznets' empirical conclusion may not be suitable for our country's situation, especially due to the difference in the stage of historical development, there is a big difference between $300-$500 and $300-$500 now. At the same time, China is a large developing country in transition from a planned economy to a market economy, and development is the hard truth, the eternal theme. Moreover, with the establishment and improvement of the market mechanism, the market mechanism will play a greater role in the distribution pattern and scale of distribution. Therefore, a reasonable and orderly income gap that meets the requirements of market economy development and is conducive to the optimal allocation of resources and the improvement of economic efficiency should first be affirmed, and at the same time, more environmental support should be given in terms of policy. Especially in the initial distribution, efficiency should be put on a more important position.

2. Create a fair environment for income distribution, and pursue fairness at the starting point rather than at the end. The so-called fairness of the starting point means that people stand on the same starting line and obtain different results through their own competition, while the fairness of the end point means that the final benefits of the members of the society are the same without distinguishing their efforts in the process of competition. Since ancient times, China has had the idea of "not suffering from scarcity, but from uneven distribution", and the lack of due recognition and respect for private property is essentially a pursuit of "fairness at the end of the line". This will affect the improvement of social efficiency at the present stage and may also foster a group of lazy people. The adjustment of the income distribution policy is not to make the rich poorer, but to make the poor richer. The economic cake should be enlarged from the perspective of incremental growth, so as to raise the income level of the poor, instead of depriving the rich from the perspective of stock. Create a level playing field, so that individual residents with their personal ability to obtain a reasonable return on income, which should be the general direction of the current income distribution.

3. The problem of income disparity in the distribution of income according to "capital" should be examined in the context of the long history of social development. Capital is the material basis of social production, is the materialization of human society's labor, as the material bearer of living labor in the production process and the material conditions of the role of living labor, is the necessary conditions of social production, is indispensable to the creation and value-added value of the elements and conditions, which is the development of the social economy to the stage of the market economy, the accumulation of wealth in society and the concentration of the objective inevitable. Distribution on the basis of "capital" mobilizes to the maximum extent possible the relevant factors of production in society into social production capital through the mechanism of interests, so that the market economy continues to develop on an unprecedented scale. Thus, distribution according to "capital" is a compulsory form and an effective means of social accumulation and wealth growth at a stage in history when the social productive forces have developed but are insufficient. Distribution according to "capital" is the recognition and reward of ownership of the means of production and money. Because of this, the interests of capital, like the interests of labor, cannot be ignored and are equally constitutive of the total wealth of society. Intolerance of the existence of a certain income gap in the distribution of "capital" undoubtedly leads to the infringement of capital interests, a decline in the rate of return on capital, a weakening of the desire to invest, a slowing down of the speed of capital movement, a reduction in the scale of production and a decline in the rate of economic development. Since the widening of the income gap is unavoidable in the distribution of income according to "capital", we should not simply resort to morality, justice and emotion to deal with the problem of the income gap in the distribution of income according to "capital" instead of treating it scientifically, and even less should we adopt super-economic means to abolish it. Only in this way can the productive forces develop and society develop. Only in this way can the productive forces develop and society progress.

4. Breaking up monopolies and creating a fair institutional environment for income distribution. At present, the massive existence of monopoly and the obstacles of the system has become a prominent problem in income distribution. From the operation of China's monopolistic industries, the monopoly is too high, behind which there are more unnatural institutional factors, the interests of the industry sector is more stubbornly cut off, the establishment of a fair competition order in the market has played a role in hindering, but also promote the winds of corruption, caused dissatisfaction in all sectors of the community, but also is not conducive to the development of the economy. Therefore, breaking up monopolies and creating an environment of fair competition is not only a necessity for economic development, but also a way to solve the inequality of income distribution. In addition, the highlighting of the urban-rural income gap, in addition to other factors, the systemic obstacles of urban-rural barriers is also an important factor, therefore, in order to solve the problem of urban-rural income gap, breaking down the urban-rural barriers, so that the factors of production, especially labor force in the urban and rural areas in the full and free flow of the urban and rural areas is very necessary.

5. Regulate the order of income distribution and make residents' income more transparent. At present, China's personal income sources are too complicated, broken down into more than a dozen or even dozens of kinds of income, including monetary income and in-kind income, in-unit income and out-of-unit income, salary and bonus income and welfare income and so on. As a result of the complicated and confusing forms of income, the transparency of personal income is not high, and it is impossible to truly reflect the real situation of the income gap and the gap between the rich and the poor. Disturbances in the order of income distribution, on the one hand, increase the unreasonable income gap, on the other hand, also makes the difficulty of regulating income distribution, so standardize the order of income distribution, strengthen the transparency of residents' income, on the one hand, to avoid the loss of tax sources, on the one hand, but also to a certain extent, to prevent corruption and other improper behavior, to narrow the income gap.

6. Increase re-income distribution. If the initial distribution is to prioritize efficiency, then the redistribution should focus on fairness, give full play to the function of the state in this regard, and give full consideration and care to the low-income class, which, to a certain extent, can avoid the further widening of the income gap.

7. Increase the development of the central and western regions. Try to correct the previous development policy of regional differences in order to promote economic development, give fair treatment in terms of policy environment, and take care of redistribution to promote the development of the central and western regions, in order to narrow the income gap between the residents of the eastern, central and western regions.