Account for the existing differences in wages in your country?/ account for wage differentials in your country.
- Difference in talents (natural ability) those who are naturally talented e.g. footballers, musicians usually earn higher wages than their counterparts that are not talented.
- Differences in opportunities: people with good paying jobs earn more than others with low paying jobs
- Differences in elasticity of demand; inelastic labour attracts higher wages than elastic labour
- Level of education and training; highly educated and well- trained people tend to earn more than those with low education and training e.g. Doctors versus nurses.
- Differences in physical and mental abilities; the mentally sound and physically strong tend to have ability and willingness to work and hence have higher incomes compared to those that are insane and physically weak
- Differences in infrastructure distribution. Area with even distribution of infrastructure tend to have higher incomes than others with under developed infrastructures
- Differences in age, sex, tribe and race; labour discrimination is based on these factors are used to determine individual wages.
- Risks of jobs; people in risky jobs earn bigger wages
- Difference in number of hours worked; those who work long hours are paid more than those that work a few hours
- Differences in mobility of factors of production; mobile factors of production can easily move from areas of low payment to areas of high wages unlike immobile factors of production.
- Influence of trade unions. Strong and sound trade unions agitate for favorable conditions of work.
- Political stability; areas that are politically stable attract investment than those that are unstable.
- Government policy; government tend to favor some parts of the country when allocating resources. These get higher incomes
- Globalization – Lesser-skilled Ugandan workers have been losing ground in the face of competition from workers in Asia and neighboring countries.
- Skills/expertise and responsibility– The rapid pace of progress in information technology has increased the relative demand for higher-skilled workers.
- Social norms –CEO pay is very much higher than a normal worker
CATEGORIES Economics
TAGS Dr. Bbosa Science
