Account for differences in wages in your country.
- Variation in levels of skills; skilled employees are paid more than unskilled employees
- Differences in bargaining power of an individual; individual with high bargaining power are paid relatively more.
- Difference in people’s ability to work; hardworking people are paid more
- Differences in expertise and responsibility; workers who hold high responsibilities such as head teachers are paid more than those of low responsibility such as cleaners.
- Differences in the degree of elasticity of labour. Workers whose labour supply is inelastic tend to get higher wages due to quasi rent received.
- Difference in the marginal rate of technical substitution: this refers to the ease with which labour can be substituted for capital. Labour in Uganda is easily substituted for capital, hence its demand is low leading to low wages.
- Difference in talents and natural gifts, talented employees are paid more such as in entertainment and games.
- Imperfect knowledge in labour market; some worker receive low wages because they lack knowledge for regions where labour is paid higher.
- Differences in level of education especially in public services wages are tied to education level.
- Differences in future expectation and prospects or promotion; workers expecting promotion will accept low pay in short run.
- Risk of employment: risky jobs such as mining attract high wages
- Discrimination in labour market due to corruption favors some workers with higher wages.
- Gender: women are usually paid less than men in the same responsibility.
- Difference s in number of hour worked; work for longer hours attract higher wages.
CATEGORIES Economics
TAGS Dr. Bbosa Science
