Generally, wages differ for different types of jobs. Wages are determined with respect to the marginal productivity of labor, which is different for different employment and individual labor.
Marginal productivity of labor in turn depends on the demand and supply of labor as well as demand of products produced by the labor.
The differences in the wages occur for different types of jobs due to the following reasons:
Refers to the differences in the productivity of labor. The efficiency of labor depends on the educational qualification, training, background, and working conditions. The difference in efficiency of labor leads to difference in their wage rates.
ii. Unique skills:
Refers to special skills possessed by labor. The demand for such labor is high and their supply is low. Therefore, the wage rate for such labor is high.
iii. Disagreeable employment:
Refers to jobs that every individual cannot perform as they can hamper their status quo in a society. For example, sweeper work and mending shoes. These types of employments are done by a particular sector of the society because of their family business.
iv. Future opportunities:
Affects the wage rate to a larger extent. The employment having enough future opportunities but less wage rate would be preferred more over the employment having less future opportunities but high wage rate.
v. Risky occupations:
Include jobs that involve a high degree of risks, for example, chemical industry jobs. Such jobs have high wage rate as compared to less risky jobs.
vi. Temporary or permanent employment:
Affects the wage level to a larger extent. A temporary employment has a high wage rate as compared to the permanent employment.
vii. Collective Bargaining:
Refers to the differences in the bargaining power of trade unions in different industries. The industry having a powerful trade union has higher wage rates as compared to the industry having a less powerful trade union. Thus, the aforementioned factors an- responsible for differences in wage rates. Apart from these factors, wage rates differ according to gender of labor. For example, women are paid less than men.
Such discrimination takes place due to the following reasons:
Refers to the tradition that has been passed from generation to generation to pay women lesser than men. It happens even in the well-developed nations.
Acts as a major reason for the discrimination between men and women. Most of the women do not take their career seriously. After marriage, women do not prefer to work due to family problems and even they confine themselves to their families only.
Implies that men are generally assumed more efficient than women. Therefore, men get a good salary package as compared to women.