Reasons For Different Wages In Different Employments
Or The Problems Of Relative Wages
The rate of wage in all employments is not the same. It differs from occupation to occupation. Even men of equal caliber earn different amounts in the same occupation or in different professions. What are the reasons for these difference in wages? Why is not labour paid the same amount everywhere. The reasons for these variations in wages are as follows:
1. Existence of Non-Competing Groups Among Workers Cannes divides society into five distinct groups.
- Unskilled labour.
- Semi-skilled labour.
- Skilled labour.
- Middleclass workers comprising of clerks, salesman, stenographers, etc.
5 Highest group, consisting of professionals, like doctors, engineers, businessmen, etc.
Existence of ‘non-competing groups: Cannes believes that if the wages of the workers in a certain group increase, there will be very little mobility of labor to that group. It is due to the fact that the workers of one group are either handicapped due to non-availability of training facilities or they are prevented by social and economic considerations from entering those occupations. For instance, the son of a sweeper or a peon rarely gets- an opportunity to receive higher education. Similarly, if the wages of doctors increase, there will be no tendency on the part of unskilled labour to migrate to that occupation. When such conditions prevail, there exists non-competing groups among workers. The wages in each group are then determined by its demand and supply conditions. If the supply of workers in one group is higher than its demand, the level of wages in that particular group will be low and vice versa. The reader can now easily understand that one of the important factor which is responsible for wage differencesjs the existence of non-competing groups among the workers.
- 2. Difference in efficiency. The variations in wages can also be due to differences in efficiency of the workers. If a labbur is ,very intelligent and efficient, he will receive higher wages than a worker who is less efficient. .
- 3. Cost of learning a profession. If in a certain profession, the cost of learning is very high, the labour must be paid higher wages, otherwise people will be not be attracted to the occupation. For instance, an engineer earns more than a clerk because the former has received more education than the later.
- 4. Regularity or irregularity of employment. If in a certain occupation the work is seasonal and intermittent, the wages paid to the labour are usually higher than in a work which is permanent and regular. It is ‘clue to this fact that man by nature prefers a job which is of a permanent nature. He is ready to accept low wages if the job is regular and permanent than to accept a bit higher wages in a work which is of a temporary nature.
- 5. Agreeableness of occupation. The workers who are employed on disagreeable jobs generally receive higher wages than those in agreeable jobs. If wages in both kinds of occupations are the same, then no one will be ready to work in disagreeable occupations. Here, Marshall has pointed out ‘how is it that some of the most disagreeable jobs, like the work of a sweeper are carried out for a very low wages? The answer is firstly, it is due to the existence of non-competing groups. Secondly, the cost or learning this ‘profession is almost nil. Thirdly, the number of workers to do this job is very large. As the supply of labour happens to be large than its demand, so the level of wages of sweepers is low.
- 6. Chances of success. If in a certain occupation, the chances of future success are
bright, a worker may accept lower wages. In case, the prospects of success are dim in a certain job, the labour will be lured only by a higher start.
- 7. Social status. Workers are also attracted to accept lower wages in certain occupations where one is held in great social esteem. If the work is risky and
disagreeable, the wages must be high to induce a person to come forward to accept that job.
- 8. Degree of trust reposed in a worker. Wages also differ according to the degree of trust reposed in a worker. If a job is trustworthy and very responsible, labour must be paid higher wages. For instance, the work of superintendent in an office involves more
trust and responsibility than that of a clerk. So the former is paid higher wages than the later.
Related Economics Topics
- Why Are Wages Of Women Lower Than Men
- Modern Theory Of Wages
- Wage Determination
- THE ECONOMIC RESOURCES
- WAGE DETERMINATION QUESTIONS