Wage differentials - Chapter 8
- 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
- Some occupations are held in high esteem
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