Than a blacksmith compensating definition the job

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than a blacksmith… compensating definition - The job that pays the most is the least wanted one - Graphs have same demand; however, job a and b, b being the more dangerous job… fewer workers want to work here, called labor supply which falls in job B. People who are less willing to work shift to job A because it’s safer which wage goes down. - W b -W a is the compensating differential for the higher risk. In equilibrium, the marginal worker is indifferent between 2 occupations. No further movement. Reef question on the deadliest catch in Alaska: The wages decreased since the job got safer, and it was due to supply effects. Do unions raise wages?? - No - It is true that wages in unionized jobs tend to be higher than those in non-unionized jobs. - Unions graph of supply and demand shows that similar labor and capital labors. - Unions may restrict supply and demand negotiate an above market-clearing wage. - Restrict amount to raise price - If wage is higher, the firm will employ less people. The people who didn’t get a job go to a non-unionized job and shift supply there. - Some workers displaced by the union sector spill over to non-union sector and lower non-union wages. - W u- W n is the union/non-union wage differential Reef question:
12 Labor unions- increase wages for their members while they lead to lower wages for non-union members. Labor market discrimination: - Groups, race, sex, ethnicity, etc. - Types: Statistical discrimination- decisions about individual based on group characteristics Ex: ban the box on job applications that ask have you ever been convicted; people wanted to ban this. Does more harm than good? Maybe As this example suggests, even if statistical discrimination is not driven by ill-will it *can* still have long-run negative consequences for the discriminated-against group. Preference based discrimination- Employer based- I prefer to hire group X over Y Employee based- I prefer to work with group x over y Customer based- I prefer services from group x over y Governmental- government power used to favor one group over another. Employers who practice employment-based discrimination are not maximizing profits. Employers who do not discriminate will earn higher profits than those who do. In a competitive market, discriminating employers will be displaced by employers who do not discriminate in the long-run The first type of discrimination, employer discrimination, is the least likely to withstand market forces. If an employer doesn’t like hiring workers of a certain type, they will be out- competed over time by firms that don’t have the same attitudes. For example, when Jackie Robinson broke the color barrier in baseball, other baseball teams had to start signing black players or be at a competitive disadvantage to the Dodgers. And it’s not a coincidence that Kentucky recruited their first black basketball player only a few years after losing to Texas Western, a team that started five black players, in the NCAA championship game. Customer-based preferences -

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