Personal Income Distribution and Social Security in China

Personal Income Distribution and Social Security in China

Personal Income Distribution in China

Distribution Based on Labor as the Mainstay with Multiple Distribution Modes Coexisting

During a certain period, the national income created by society must be reasonably distributed among the government, enterprises, and individuals to form government revenue, enterprise income, and personal income, respectively, to meet different social needs. The mode of personal income distribution is not arbitrarily decided; it is determined by the ownership of means of production. China's adherence to public ownership as the mainstay, with the coexistence of multiple forms of ownership, determines that the distribution system will inevitably be based on labor distribution as the mainstay, with multiple distribution modes coexisting.

Distribution based on labor is a principle of socialism. Its basic content and requirements are that members of society who have the ability to work must participate in labor; after making necessary deductions, personal distribution is based on the labor provided by the worker, including the quantity and quality of labor, with more work resulting in more earnings and less work resulting in less.

Implementing labor-based distribution directly links workers' personal income with the quantity and quality of their labor, helping to fully mobilize workers' enthusiasm and creativity, motivating them to study science and technology, improve labor skills, and promote the development of social production. Labor-based distribution fundamentally denies the exploitative system of unearned income that existed for thousands of years and reflects the social status of workers engaged in collective labor and equal distribution.

Adhering to labor-based distribution as the mainstay, with the coexistence of multiple distribution modes, involves allowing production factors such as labor, capital, land, knowledge, technology, management, and data to participate in income distribution. This approach stimulates the vitality of all factors, allows all sources of social wealth creation to flow fully, promotes the optimal allocation of resources, and drives economic development.

The current personal income distribution system in China has diversified the sources of income for residents. In terms of income channels, residents' income mainly includes labor income and property income. Labor income refers to income obtained through labor, including wages, bonuses, and allowances. Property income refers to income obtained from owned assets, such as interest from bank deposits and rent from leased properties.

Labor is the source of wealth, and any income we obtain ultimately comes from labor. We must promote the social trend of respecting labor as the most glorious, noble, great, and beautiful activity, fostering a work ethic that honors hard work and shames laziness. We should encourage all workers to become prosperous through diligent, honest, and creative labor.

Improving Personal Income Distribution

The distribution system is a fundamental system for promoting common prosperity. Income distribution is the source of people's livelihoods and the most important and direct way to improve people's livelihoods and ensure that the fruits of development are shared by the people. Therefore, it is essential to improve personal income distribution, rationalize the income distribution relationship among the state, enterprises, and individuals, and establish a coordinated system for primary distribution, redistribution, and tertiary distribution, thereby improving an income distribution system that reflects efficiency and promotes fairness.

Improving personal income distribution requires maintaining a basic synchronization between the growth of residents' income and economic growth, as well as between the increase in labor compensation and labor productivity.

In primary distribution, efforts should be made to increase the share of residents' income in national income distribution and to raise the proportion of labor compensation in primary distribution. We should adhere to the principle of "more work, more pay," encourage prosperity through hard work, promote equal opportunities, increase the income of low-income earners, and expand the middle-income group. We should also improve the policy system for factor-based distribution and explore multiple channels to increase the factor income of low- and middle-income groups, and diversify the channels for increasing urban and rural residents' property income.

In redistribution, we should increase the regulatory role of taxes, social security, and transfer payments. We should improve the personal income tax system, regulate income distribution order, standardize wealth accumulation mechanisms, protect legal income, adjust excessively high incomes, and eliminate illegal income.

Improving personal income distribution should also emphasize the role of tertiary distribution, guiding and supporting willing and capable enterprises, social organizations, and individuals to actively participate in public welfare and charitable activities.

China's Social Security System

Diverse Forms of Social Security

To address various issues that people may encounter in real life, such as illness, unemployment, aging, disasters, and poverty, the state has established a social security system in which the government and society bear primary responsibility. Social security is a basic institutional guarantee for safeguarding and improving people's livelihoods, maintaining social equity, and enhancing people's well-being. It is an important institutional arrangement for promoting economic and social development and ensuring that the vast majority of people share in the benefits of reform and development. In the process of China's economic and social development, the increasingly diverse forms of social security play an increasingly broad role.

Social security can effectively maintain the stability of social order by preventing and resolving survival crises for members of society and ensuring their basic living rights, thus serving as a safety net for people's livelihoods.

Social security, through the redistribution of national income, functions as a regulator of income distribution, able to adjust the interests between different social groups, resolve social contradictions and conflicts, and promote social equity and justice.

Social security, through risk-sharing and shared responsibility, fully plays the role of social mutual assistance, and through self-help and mutual assistance among social members, it promotes the sustained and healthy development of society.

Social security in China is mainly composed of social insurance, social assistance, social welfare, and special care for certain groups, as well as other forms of social security, which together constitute China's social security system.

Social insurance is the core of China's social security system. It ensures that citizens receive material assistance from the state and society in cases of old age, illness, work-related injury, unemployment, and childbirth by pooling funds through contributions from the government, employers, and individuals. In China, social insurance primarily includes basic pension insurance, basic medical insurance, work injury insurance, unemployment insurance, and maternity insurance.

Social assistance is the earliest form of social security, with the longest history. It involves the government providing free assistance to citizens who cannot maintain a minimum standard of living due to natural disasters or other economic and social reasons, thereby ensuring their basic living standards. Social assistance is the "last line of defense" for ensuring the safety of people's lives and their survival rights.

Social welfare refers to the socialized services, in-kind provisions, or welfare subsidies provided by the government and society to the elderly, disabled persons, women, children, and other social members to meet their living needs and continuously improve and enhance their quality of life. It is the highest level of social security.

Special care and preferential treatment refer to the comprehensive social security provided by the state and society, as prescribed by law, for active-duty military personnel, veterans, martyrs' families, and other groups, including material assistance, living and work arrangements, and psychological comfort.

Improving the Social Security System

Improving the social security system requires treating every citizen fairly and ensuring that they enjoy the corresponding social security rights. To achieve this, we must establish a universal, unified, and fair social security system that covers both urban and rural areas, forming a seamless "safety net." At the same time, improving the social security system should focus more on protecting the interests of vulnerable groups, narrowing the gap between the rich and the poor, and promoting harmonious social development.

Improving the social security system requires balancing what is feasible with available resources, ensuring that the level of social security is in line with economic and social development. As economic and social development progresses, people's demands for life security continue to rise. We must continue to meet people's social security needs by strengthening the construction of the social security system. At the same time, economic development is the foundation of social security. Without the necessary economic strength to support it, even if a social security system is established, it cannot be sustained. Only by establishing a social security system that matches the level of economic development and provides appropriate protection can social security achieve sustainable development.

Improving the social security system requires clarity of rights and responsibilities. Enjoying social security is a statutory right for members of society and an important marker of modern social civilization and progress. At the same time, the collection of social security funds involves the economic interests of the government, enterprises, individuals, and other units, requiring reasonable sharing of responsibility among all parties. To improve the social security system, it is necessary to clarify the rights and responsibilities of all parties and ensure strict supervision in accordance with the law.

In summary, to establish a sound multi-level social security system, we must adhere to the principle of universal coverage, accelerate the establishment of a multi-level social security system that covers the entire population, is fair, unified, safe, standardized, and sustainable, and meets the requirements of securing the bottom line, weaving a tight safety net, and establishing effective mechanisms.