Wage Differentiation Flashcards
(12 cards)
What is Wage Differential
The difference in wages between workers with different
skills in the same industry, or between workers with comparable skills in different industries or localities
What does Compensating Wage Differential refer to?
A reward for risk-taking, working in poor conditions and during unsocial hours.
What does Reward for human capital refer to?
The differentials compensate workers for (opportunity and direct) costs of human capital acquisition.
What does Differences in labour productivity and revenue creation refer to?
Workers whose efficiency is high and generate revenue for a firm often have higher pay.
What does Trade unions’ collective bargaining power refer to?
It is used to achieve a mark-up on wages compared to non-union members
What are some Artificial barriers to labour supply?
Such as professional exams, migration controls
What is Employer discrimination?
Employers may perceive older workers as less able to learn new tasks, less flexible, and less ambitious & pay lower wages
What are Pay Gaps?
The difference in earnings between different groups of people
e.g women, ethnic minorities earning less
What is the Gender Pay Gap?
The difference between average hourly earnings (excluding overtime) of men and women as a proportion of average hourly earnings (excluding overtime) of men’s earnings
What is an Ethnic Pay Gap?
Disparities in income based on factors such as race and ethnicity
What is a Disability Pay Gap?
The differences in earnings between individuals with disabilities and those without disabilities
Causes of pay gaps?
• Discrimination
• Occupational segregation
• Educational and occupational choices
• Work Experience and seniority
• Negotiation and salary transparency
• Unconscious bias
• Parental and caregiving responsibilities
• Lack of workplace flexibility and inclusion
