WAGE DIFFERENTIALS

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WAGE DIFFERENTIALS

We may summarise here the causes which create differences in wages in different employments professions, and localities : These may be due to different inborn qualities, education, training and conditions under which work is performed. When eCliciellcies are different, wages must be different (ii) Existence or Non-competing Groups. As explained above, these groups arise because of the difficulties in the way of mobility of labour from low paid to high-paid employments. These difficulties may be due to geographical, social or economic reasons. They may arise from lack of transport facilities, existence of family ties or caste barriers, and lack of means for better training, etc. . (iii) Difficulty or Learning a Trade. The number of those who can master difficult trades is small. Their supply is less than demand for them, arid their wages are higher.
(iv) Differences in Agreeableness or Social Esteem. Disagreeable employments must pay higher wages in order to attract laborers. If, however, dis- Intelligibly! Walt eM be performed by unskilled workers, who cannot do anything better (due to caste or other disabilities), wages may he quite low, e.g., sweepers in India.

(v)Rebuttal Prospects. If an occupation provides opportunities for future promotion, people will accept a lower start in it, as against another occupation offering higher initial rewards but no chances of rise in the future. The number of top prizes available in a profession also accounts for differences in wages, (.';) Hazardous and dangerous occupations generally offer higher emoluments. (vii) Regularity or irregularity or employment also exerts a strong influence on the level of wages. Regular employment generally carries a low salary. (viii) Collective Bargaining. The differences in the strength and militancy of trade unions also account for differences in wages in different industries. To Sum Up. We may sum up broadly the causes of differences in wages as worker’s preferences, trans- Cer costs, ranges of abilities and effects of collective bargaining. It should be borne in mind that all these factors create differences in wages by affecting the adjustment of supply of labour to demand for it in various employments and grades. Wages arc, in every case, determined by the degree of scarcity in relation to demand for labour, or by the marginal productivity of labour with respect to each kind of work.

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WAGE DIFFERENTIALS