6.7 Discrimination In The Labour Market Flashcards
What is wage discrimination?
Paying different workers different wage rates for doing the same jobs
Who has the power to implement wage discrimination?
Employers who possess sufficient market power
Diagram for wage discrimination
describe this diagram for the effect of wage discrimination introduced into a previously competitive labour market
In the absence of wage discrimination all workers paid W1(employers total cost shown by (OW1AL1)
What does wage discrimination do to the wages firms pay?
Reduces it to the minimum they will accept
Area O L1 A B
How is price discrimination and wage discrimination different?
Price discrimination: entire consumer surplus is transferred to producer surplus (enlarging firms profit
Wage discrimination: worker accepts lowest wage but their employment is not transferred elsewhere
In real life where does wage discrimination occur?
Imperfectly competitive labour markets
Who does wage and price discrimination suit?
The firm at it increases profits (price discrimination) and reduces costs(wage discrimination)
What is required for wage discrimination to successfully take place?
Employers must be able to identify and separate different groups of workers supplying the same type of labour
What is the two types of wage discrimination that usually occur?
Gender
Ethnicity
What has equal pay legislation been in place since?
1972
(+ equality act 2010)
Diagram for how gender discrimination may affect a labour market?
Why are women paid less than men(2 reasons)
-women work predominantly in lower paid industries and occupations
-likely to take maternity leave when they would get promoted
-
Effect of gender discrimination on another market which doesn’t gender discriminate
