Second, a minimum wage system might foster labour market rigidity and thus reduce labour demand, which accordingly might increase income inequality. In 1999, the Ministry of Labour and Social Security issued a Notice on Building a Wage Guideline System on the Labour Market, which is important for labour market development and the reform of enterprise wage systems. The Wage Guideline System is helpful for formulating justified wage levels on the labour market, providing external reference standards for employers and employees to determine wage levels, increasing information for employers and employees, and improving the success rate for workers’ job applications and promoting overall efficiency in labour market operations.