Wage Differentials
F583 A2 Revision
- Created by: Brainiac101
- Created on: 27-05-15 15:32
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- Wage Differentials, Why are people paid differently?
- Each worker is unique, they have:
- Different skill sets
- experience
- education
- training
- resilience
- Different levels of MRP (Marginal regional product)
- Different individual supply factors (availability etc)
- Workers are subject to discrimination
- Different skill sets
- Market forces will tend to equalise in the long run
- Pay is not all the story, net benefits and advantages not just cash, e.g personal satisfaction
- pecuniary benefits:cash
- Quasi-pecuniary benefits (e.g pension, car, lunches etc)-things provided in kind which have monetary value
- Non-pecuniary benefits: benefits that cannot easily be given a price ( Nature of job, job security, working enviroment etc)
- If pecuniary benefits are low, non-pecuniary benefits often act as a COMPENSATING DIFFERENTIAN
- Pay is not all the story, net benefits and advantages not just cash, e.g personal satisfaction
- Labour is immobile in the short-run
- Occupational immobility
- Geographical immobility
- Lack of competition on the supply side
- monopolistic supply of labour thanks to Trade Unions
- Lack of competition on the demand side due to monopsonistic buyers of labour
- Each worker is unique, they have:
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