Abstract: From the micro-level, this paper measures the proportion of labor income and tries to reveal the deep-lying causes, the interest distribution mechanism behind and the internal logic for the lower proportion of labor income from the institutional aspect. By making use of the data of China's manufacturing listed companies, it measures the changing trend of wage share paid by enterprises and conducts a quantitative test on the factors affecting the wage share. The results show that, on the average, taxation accounts for 41.0% as the highest, labor wage accounts for 32.8%, and capital share accounts for 26.2%; the share of capital is rising, indicating that laborers are generally in a disadvantageous position. The analysis reveals that the wage share is affected by such factors as the interest gaining capacity of both of the labor and the management, the business taxes to the government and the capital costs payment level. When the labor side lacks sufficient protection, enterprises would shift the excessive taxation and capital pressure to the laborers, leading to the decrease of wage share. The internal causes are that the government levies taxes on the enterprises, in turn the enterprises squeeze the wages of the laborers; because the laborers are short of enough ability to protect their interests, finally their wage and the wage share are always low and declining.

Key words: wage share, manufacturing industry, listed companies, taxation pressure