differences in earnings between different groups of workers

Sometimes we find that workers who are doing the same job and have the same job title earn different salaries. In this topic we discuss the reasons for the difference in earnings between different groups of workers.

Male/female

Male workers usually earn a higher salary compared to their female counterparts. The reasons could be:

1. Males usually devote more working hours(for many reasons, women find it difficult to devote extra time for the work. Eg:- Women may have to attend to children at home)
2. Males are always part of labor force, so they have more experience. (many female workers may have to take more leaves from work due to many reasons like, pregnancies )
3. Males are better at negotiating salaries (this can be arguable nowadays, even a female can negotiate for better salaries. But the above factors could give her a lower bargaining power than a male)
4. Discrimination (many societies are still quite backwards in this aspect. Women could be discriminated even if the nature of the job does not give men any physical or any other advantage over women.)

Skilled/Unskilled

Skilled workers earn more than unskilled workers because:

1. Skilled workers have greater productivity (they can produce more efficiently, they can produce more output than unskilled workers with the same resources
2. Their supply is low. (skilled workers are often difficult to get because they are not available as much as unskilled workers)
3. They have special skills to perform a particular job (there are certain jobs which only a skilled worker can do. Example, doctors, engineers, electricians, accountants)
4. Their job requires a qualification (to get qualified in a particular field may take years and requires a lot of money to pay for the training and course fees)

Agricultural/manufacturing/service

In the third world countries, the agricultural workers are paid less than manufacturing workers because the supply of agricultural workers in third world countries is high. It is also because manufacturing industries require skilled workers compared to agricultural industry and the risk involved in manufacturing industy is also higher than the agricultural industry.
Workers belonging to the services industry earn more than the workers in manufacturing industry.

Discrimination

Discrimination can happen in many ways. Gender discrimination is already mentioned above. There are other ways in which discrimination can happen. Sometimes law of a particular country may give certain privileges to a employees of a particular field (for example, independent commissions in Maldives) who may earn a much higher salary even with a lower level of education compared to many other professional jobs.

Next topic: Trade Unions

Leave a Comment