Microeconomic decision-makers - Workers (3)
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1.
Question 2: "While some argue that differences in wages between men and women are due to differences in experience and career choices, discrimination is the primary cause." Discuss this statement.
Answer: This statement presents a debate about the primary cause of the gender wage gap. While differences in experience and career choices do contribute to some extent, a strong argument can be made that discrimination is the primary driver.
Arguments for Discrimination being the Primary Cause:
- Persistent Pay Gap Despite Similar Qualifications: Even when women have the same qualifications and experience as men, they often earn less. This suggests that factors beyond experience are at play.
- Occupational Segregation is Often Shaped by Discrimination: The concentration of women in lower-paying occupations is often a result of societal expectations and discriminatory practices that steer women away from higher-paying fields.
- Bias in Hiring and Promotion: Studies have shown that employers can unconsciously (or consciously) favour male candidates over equally qualified female candidates. This bias can limit women's career progression and earning potential.
- Undervaluation of Female Skills: Historically, and to some extent still today, skills traditionally associated with women (e.g., caregiving, communication) have been undervalued in the labour market. This contributes to lower pay in those fields.
Arguments for Experience and Career Choices Contributing:
- Differences in Career Paths: Men and women may make different career choices, leading to differences in experience and seniority. This can be influenced by personal preferences, family responsibilities, and societal expectations.
- Career Breaks for Family Responsibilities: Women are more likely to take career breaks for childcare, which can impact their career progression and earnings.
- Negotiation Styles: Some research suggests that women may be less likely to negotiate their salaries as aggressively as men.
Conclusion: While experience and career choices play a role, the persistent and significant gender pay gap, even when controlling for these factors, strongly suggests that discrimination is the primary cause. Discrimination can manifest in various forms, limiting women's opportunities and perpetuating unequal pay. Addressing this requires tackling both overt and subtle forms of bias in the labour market.
2.
Consider the impact of technological change on the occupational mobility of labour. Discuss how technological advancements can both increase and decrease occupational mobility. Give examples to support your answer.
Technological Change and Occupational Mobility:
Technological advancements have a complex and often contradictory impact on occupational mobility. They can both increase and decrease the ease with which people can move between jobs.
Increasing Occupational Mobility:
- Remote Work Opportunities: Technological advancements like the internet and video conferencing allow people to work remotely, regardless of their location. This significantly increases occupational mobility by removing geographical barriers to employment. For example, a software developer in a rural area can work for a company in a major city.
- Online Job Platforms: Online job boards and platforms (e.g., LinkedIn, Indeed) make it easier for people to find jobs in different industries and locations. These platforms provide access to a wider range of opportunities and facilitate the job search process.
- Upskilling & Reskilling Opportunities: Online learning platforms and digital resources provide opportunities for workers to acquire new skills and adapt to changing job market demands. This makes it easier for them to transition to new occupations.
Decreasing Occupational Mobility:
- Skill Obsolescence: Technological advancements can make certain skills obsolete, leading to job losses and reduced occupational mobility for workers who lack the skills to adapt. For example, automation in manufacturing has reduced the demand for manual labour.
- Increased Competition: Remote work and online platforms have increased competition for jobs, as workers can now apply for positions from anywhere in the world. This can make it more difficult for workers to find employment, particularly those with less in-demand skills.
- Digital Divide: Unequal access to technology and digital skills can limit occupational mobility for those who lack the necessary resources to participate in the digital economy. This can exacerbate existing inequalities.
In conclusion, while technology offers significant opportunities to increase occupational mobility, it also presents challenges that can hinder it. Addressing the digital divide and providing access to upskilling and reskilling opportunities are crucial to ensuring that technological change benefits all workers.
3.
Consider the following diagram illustrating the supply and demand for labour. The government introduces a national minimum wage.
Using the diagram, explain how the national minimum wage affects the market for labour. Discuss the potential consequences for both employers and employees.
The diagram shows the initial equilibrium wage (W1) and quantity of labour employed (Q1). The introduction of a national minimum wage shifts the supply curve of labour to the left to S1. This is because employers now have to pay a higher wage, reducing the quantity of labour they are willing to employ at each wage level.
Effects on Employers: Employers face increased labour costs. This could lead to several consequences:
- Reduced Profitability: Firms may experience lower profits if they cannot fully pass on the increased labour costs to consumers through higher prices.
- Reduced Investment: Firms may postpone or cancel investment plans due to higher operating costs.
- Reduced Employment: As shown in the diagram, firms may reduce their workforce to manage higher labour costs. This could lead to job losses, particularly for lower-skilled workers.
- Increased Prices: Firms may choose to increase the prices of their goods and services to offset the higher labour costs.
Effects on Employees: Employees benefit from the higher minimum wage, which increases their income. However, some employees may lose their jobs due to reduced demand for labour. The minimum wage can also provide a safety net for low-skilled workers, reducing poverty and inequality. It can also incentivize workers to gain skills and improve their productivity to earn more.