【正文】 2020 by Harcourt, Inc. Summary ? Wages are sometimes pushed above the equilibrium level because of minimumwage laws, unions, and efficiency wages. ? Some differences in earnings are attributable to discrimination on the basis of race, sex, or other factors. ? When measuring the amount of discrimination, one must correct for differences in human capital and job characteristics. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. Summary ? The return to accumulating human capital is high and has increased over the past decade. ? There is much variation in earnings that cannot be explained by things economists can measure. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. Discrimination by Customers and Governments ? Government policies: ?When the government mandates discriminatory practices or requires firms to discriminate, this may also lead to discriminatory wage differentials. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. Discrimination by Customers and Governments ? Although the profit motive is a strong force acting to eliminate discriminatory wage differentials, there are limits to its corrective abilities. ?Customer preferences ?Government policies Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. Discrimination by Employers ? Nondiscriminatory firms will tend to replace firms that discriminate. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. Measuring LaborMarket Discrimination ? Because the differences in average wages among groups in part reflect differences in human capital and job characteristics, they do not by themselves say anything about how much discrimination there is in the labor market. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. Table 2 Median Annual Earnings by Race and Sex Copyright169。 2020 by Harcourt, Inc. Measuring LaborMarket Discrimination ? People differ in the amount of human capital they have and in the kinds of work they are willing and able to do. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. Measuring LaborMarket Discrimination ? Discrimination is often measured by looking at the average wages of different groups. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. THE ECONOMICS OF DISCRIMINATION ? Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. 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. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. 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. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. 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. Harcourt, Inc. items and derived items copyright 169。2020 SouthWestern Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. 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. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. 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. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. 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. Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. 19 Earnings and Discrimination Harcourt, Inc. items and derived items copyright 169。 2020 by Harcourt, Inc. A Shift in Labo