wage differentials essay

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04. Using extract D, identify two significant points of comparison between the data shown in the two bar charts (5 marks)

Agriculture is the biggest sector of employment for migrant workers at 92% whereas it is the smallest for UK employment at 10%.
Manufacturing is the lowest in terms of employment for migrant workers at 12% and is the second largest with 10% of UK employment.
Distribution, hotels and restaurants is the represents the highest amount of UK employment in industrial sectors with 18% and is the second highest for migrant workers with just over 50%. construction is the third largest in terms of migrant employment sector with 30% and the third largest sector of UK employment with 9%.

05.Extract E gives examples of wage differentials.
Explain what is meant by the term wage differentials and analyse two reasons suggested by economic theory why wage differentials occur.

Wage differentials can be defined as the differences in wage rate for different groups of people and between individuals in the same occupation. For example Premier league footballers get paid an average of £3million a year whereas a nurse who cares for people gets only around £28,000 a year.

Wages are determined by demand relative to supply. For example if supply is high but demand is low then wages will be low. One of the main reasons why wage differentials occur is because of the differences in the supply of labour. This is the quantity of workers who are available for the job at each level of pay. Some people may not have the skills or qualifications because they haven’t had the training to be able to supply themselves.

Another reason why wage differentials occur is because of the differences in the demand for labour. A high pay is caused by a high demand for workers and a low supply of them. An example of this is premiership footballers, not many people have the skills to be able to play at this level and there is a very high demand for them

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