Wage Differentials and Wage Discrimination

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Wage Differentials and Wage Discrimination. A2 Economics. Aims and Objectives. Aim: Understand wage differentials in the labour market. Objectives: All: define wage differentials Most: analyse wage differentials in the labour market - PowerPoint PPT Presentation

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<p>Wage Differentials and Wage Discrimination</p> <p>Wage Differentials and Wage DiscriminationA2 EconomicsAims and ObjectivesAim:Understand wage differentials in the labour market.</p> <p>Objectives:All: define wage differentialsMost: analyse wage differentials in the labour marketSome: evaluate whether or not wage differentials can be justifiedStarter: DiscussionWhy do men on average get paid more than women?</p> <p>Why do premiership footballers get paid more than brain surgeons?</p> <p>Why do white people on average get paid more than black people?Wage DifferentialsDefinition:Differences in wage rates arising between individuals, occupations, industries, firms, and regions.</p> <p>Task: In groups try and think of as many reasons, as to why wage rates differ in an economy.Why do wages differ?Wage Differentials Between GroupsSkilled and Unskilled Workers</p> <p>Skilled workers receive higher wages than unskilled workers because the demand for skilled workers is higher and they are in fewer supply.</p> <p>MRP of skilled workers is higher.</p> <p>More difficult to substitute skilled workers</p> <p>Wage Differentials Between GroupsQuantity of Labour EmployedWage Rate/MRPQCSCDCDNSNWBWNNeurosurgeonsCleaners</p> <p>Wage Differentials Between Groups: GenderDifferences between gender.Men are paid more than women.In part due to more women working part time than men.MRP of women is less than men, therefore firms demand more men.Greater percentage of women work in lower paid jobs.More men attend universityDataWage Differentials Between Groups: Part Time and Full Time WorkersPart time and full time workers.Part time workers tend to receive lower pay than full time.Supply of part time workers is relatively high compared to demand. (MRP is low)Smaller percentage of PT workers are members of trade unions.</p> <p>Wage Differentials Between Groups: EthnicityWorkers from ethnic minority groups are paid less on average than white people.High % are employed in part time jobs such as restaurants where pay is low.Data</p> <p>Mr Average of Football Nets 1mIs the pay of top footballers justified?Economic argument for and against.Why shouldnt a nurse be paid as much? Both have inelastic demands!</p>

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