Wages will differ not only because of skill and taste differences, but also because area amenities, fiscal conditions, and the price of goods and services vary across cities. A combination of productive and unproductive amenities could both lower wages and increase the price of land.
What are the factors affecting wages?
Following factors influence the determination of wage rate:
- Ability to Pay: ADVERTISEMENTS:
- Demand and Supply:
- Prevailing Market Rates:
- Cost of Living:
- Bargaining of Trade Unions:
- Productivity:
- Government Regulations:
- Cost of Training:
Why do some workers get higher wages?
There are also wage differentials across occupations, because of differences in the demand and supply of laborers for particular jobs or occupations. These differences arise primarily because of differences in the amount of education or training required and in the desirability of the job itself.
Why are there wage differences between different jobs?
Personal Wage Differences. As there are individual differences, so are wage differentials also. An organisation offers different jobs, thus, differentials in wages for different jobs are inevitable. Wage differentials are also known as inter-industry, inter-firm, inter-area or geographical differentials.
What are the main causes of wage differentials?
Top 5 Causes of Wage Differentials – Explained! 1. Occupational Differences:. Occupations in an organisation widely differ from one another in terms of skill… 2. Inter-firm Differentials:. There are wage differentials of workers in different plants in the same area and… 3. Regional Differences:. …
Why are some people paid more than others?
The nature of work influences the wage differences. Dangerous, disagreeable, hazardous and risky work carry higher money wages to attract larger supply of labour. For example, The labour working in the coal mines are getting more wages than a peon in the office. Soldiers are getting more wages than ordinary police personnel.
Why are wages so high in the labour market?
One reason is that the market demand for skilled labour grows more quickly than the demand for semi-skilled workers. This pushes up pay levels. Highly skilled workers are often in inelastic supply and rising demand forces up the ” going wage rate ” in an industry.
