wage differentials Flashcards
(16 cards)
What are wage differentials?
Wage differentials refer to the differences in wages paid to workers doing similar or different jobs.
Where can wage differentials exist?
Wage differentials can exist within the same industry or among different industries.
What are some demand-side imperfections in the labour market?
Demand-side imperfections include differences in marginal productivity and employer power (e.g., monopsonies).
What are some supply-side imperfections in the labour market?
Supply-side imperfections include lack of worker mobility, skills mismatches, and geographical immobility.
How does labour mobility affect wages?
Labour mobility affects wage levels by creating regional wage gaps and increasing competition for jobs.
What is geographical mobility?
Geographical mobility is the ability of workers to move from one location to another.
What is occupational mobility?
Occupational mobility is the ability to switch from one type of job to another.
What are compensating wage differentials?
Compensating differentials are wage differences that arise due to non-wage aspects of a job.
What is an example of a job that may pay more due to risk?
Dangerous jobs, such as oil rig workers, may pay more to attract workers.
What role does the government play in the pricing of labour?
The government sets minimum wage laws, labour standards, migration policy, and regulates monopsonies.
What is the role of trade unions?
Trade unions use collective bargaining to negotiate higher wages, benefits, and better working conditions.
What is the role of employers’ associations?
Employers’ associations represent employers during negotiations and promote efficiency wage strategies.
What is a monopsony?
A monopsony is a market situation where a single employer dominates the labour market and has power to set wages.
What is the minimum wage?
The minimum wage is the lowest wage employers can legally pay.
What is an efficiency wage?
An efficiency wage is paying workers more to boost productivity and loyalty.
What is collective bargaining?
Collective bargaining is negotiations between unions and employers on wages and conditions.
