【正文】 Copyright169。2020 SouthWestern 19 Earnings and Discrimination Copyright 169。 2020 SouthWestern Earnings and Discrimination ? Differences in Earnings in the United States Today ? The typical physician earns about $200,000 a year. ? The typical police officer earns about $50,000 a year. ? The typical farm worker earns about $20,000 a year. Copyright 169。 2020 SouthWestern Earnings and Discrimination ? What causes earnings to vary so much? ? Wages are governed by labor supply and labor demand. ? Labor demand reflects the marginal productivity of labor. ? In equilibrium, each worker is paid the value of his or her marginal contribution to the economy’s production of goods and services. Copyright 169。 2020 SouthWestern SOME DETERMINANTS OF EQUILIBRIUM WAGES ? Compensating differentials ? Human capital ? Ability, effort, and chance ? Signaling ? The superstar phenomenon Copyright 169。 2020 SouthWestern Compensating Differentials ? Compensating differential refers to a difference in wages that arises from nonmoary characteristics of different jobs. ? Coal miners are paid more than others with similar levels of education. ? Night shift workers are paid more than day shift workers. ? Professors are paid less than lawyers and doctors. Copyright 169。 2020 SouthWestern Human Capital ? Human capital is the accumulation of investments in people, such as education and onthejob training. ? The most important type of human capital is education. Copyright 169。 2020 SouthWestern Human Capital ? Education represents an expenditure of resources at one point in time to raise productivity in the future. ? By the year 2020, a man with a college degree earned more than 89 percent more than without one. Women showed a 70 percent increase in earnings due to a college degree. Table 1 Average Annual Earnings by Educational Attainment Copyright169。2020 SouthWestern Copyright 169。 2020 SouthWestern Ability, Effort, and Chance ? Why has the gap in earnings between skilled and unskilled workers risen in recent years? ? International trade has altered the relative demand for skilled and unskilled labor. ? Changes in technology have altered the relative demand for skilled and unskilled labor. Copyright 169。 2020 SouthWestern Ability, Effort, and Chance ? Natural ability is important for workers in all occupations. ? Many personal characteristics determine how productive workers are and, therefore, play a role in determining the wages they earn. Copyright 169。 2020 SouthWestern An Alternative View of Education: Signaling ? Firms use educational attainment as a way of sorting between highability and lowability workers. ? It is rational for firms to interpret a college degree as a signal of ability. Copyright 169。 2020 SouthWestern The Superstar Phenomenon ? Superstars arise in markets that exhibit the following characteristics: ? Every customer in the market wants to enjoy the good supplied by the best producer. ? The good is produced with a technology that makes it possible for the best producer to supply every customer at a low cost. Copyright 169。 2020 SouthWestern AboveEquilibrium Wages: MinimumWage Laws, Unions, and Efficiency Wages ? Why are some workers’ wages set above the level that brings supply and demand into equilibrium? ? Minimumwage laws ? Market power of labor unions ? Efficiency wages Copyright 169。 2020 SouthWestern AboveEquilibrium Wages: MinimumWage Laws, Unions, and Efficiency Wages ? Unions ? A union is a worker association that bargains with employers over wages and working conditions. ? Strike ? A strike refers to the anized withdrawal of labor from a firm by a union. Copyright 169。 2020 SouthWestern AboveEquilibrium Wages: MinimumWage Laws, Unions, and Efficiency Wages ? Efficiency Wages ? The theory of efficiency wages holds that a firm can find it profitable to pay high wages because doing so increases the productivity of its workers. High wages may: ? reduce worker turnover. ? increase worker effort. ? raise the quality of workers that apply