Wage differentials - Chapter 8

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  • Created by: sammilaw
  • Created on: 23-02-16 15:55
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  • Wage Differentials
    • Chapter 8
    • Demand and Supply
      • High, inelastic demand + low, inelastic supply for labour = high wages
      • Low, elastic demand but high, elastic supply = low wages
      • High-skilled jobs are usually better paid due to the lesser supply - supply is inelastic
        • Also, likely to be demand inelastic due to lack of substitues
    • Relative bargaining strength
      • Powerful trade unions can bargain for higher wages
      • i.e. BMA (British Medical Association)
    • Government policy
      • National minimum wage has helped those is low-paid work
      • Increased expenditure in industries such as healthcare
        • More demand for surgeons = higher MRP
    • Esteem
      • Some occupations are held in high esteem
        • i.e. doctors, vets, lawyers
        • Leads to a higher perceived MRP = positive discrimination


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