4.1.6.7 Discrimination in the labour market Flashcards
What conditions enable wage discrimination?
Employer monopoly power (few job alternatives), Information gaps (workers unaware of pay disparities), Segmented labour markets (certain groups crowded into low-wage jobs), Prejudices/biases (gender, ethnicity, age, etc.)
Why do women earn less than men on average?
Occupational crowding: Women concentrated in lower-paid sectors (e.g., care work). Career breaks: Maternity leave → fewer promotions (26% report child-related bias). Part-time work: More common among women (lower hourly wages). Direct discrimination: Bias in hiring/promotions.
Example: BBC reports women miss top jobs (source).
How does ethnicity affect wages?
Prejudice: Ethnic minorities face hiring/promotion bias.
Example: BBC highlights pay gaps for BAME workers (source). Statistical discrimination: Assumptions about productivity.
Why do skilled workers earn more?
Higher productivity → greater MRP. Training costs: Firms pay premiums to retain trained workers. Globalisation/tech: Increased demand for skilled labour.
How might employers benefit from wage discrimination?
Lower labour costs (pay disadvantaged groups less). Flexibility: Segment workforce by skill/role. Risk: Legal penalties, reputational damage.
How does wage discrimination harm the economy?
Lost productivity: Underutilization of talent. Social inequality: Reduced mobility/consumer spending. Legal costs: Lawsuits/compliance burdens.
How has the UK addressed gender pay gaps?
Equal Pay Act (1970): Illegal to pay differently for same work. Gender Pay Gap Reporting: Firms >250 employees must disclose disparities.
How does age affect wages?
Youth: Lower wages due to lack of experience. Older workers: Bias toward ‘overqualified’ or ‘inflexible’ stereotypes.
Draw a diagram showing wage discrimination between two labour markets.
Market 1 (High-wage): High demand (D₁), high wage (W₁). Market 2 (Low-wage): Low demand (D₂), low wage (W₂).
Example: Male-dominated tech jobs vs. female-dominated retail.
Can wage gaps exist without direct discrimination?
Yes: ‘Statistical discrimination’ (assumptions based on group averages). No: Often reflects systemic biases (e.g., promotion barriers).
How has globalisation affected wage disparities?
Skilled workers: Higher demand → higher wages. Unskilled workers: Jobs outsourced → downward wage pressure.
How can wage discrimination be reduced?
Transparency: Mandatory pay reporting. Education: Bias training for employers. Stricter enforcement: Penalties for violations.
