Discuss the factors that might prevent the equalization of wage rates for identical or comparable jobs across labor markets.

1 Answer | Add Yours

readerofbooks's profile pic

readerofbooks | College Teacher | (Level 2) Educator Emeritus

Posted on

There are many reasons why there will be challenges in the equalization of wages for the same job. I will mention a few of them.

First, we need to realize that context is key. The place where a person lives makes a huge difference, because the cost of living can fluctuate radically. For example, if you live in Manhattan, you will have to pay much more for everything, (even two times more at times) than a small town in Kansas. Hence, a person can do the same work, but the person who lives in Manhattan will have to make more to live.

Second, since we live in a global world, we need to realize that the fluctuations between countries differ even more. In addition, what complicates matters even more is that we now need to deal with currency rates. For this reason, there will be differences in pay even for the same job.

These two reasons are some of the main reasons why there are wage differences in labor markets.

We’ve answered 318,910 questions. We can answer yours, too.

Ask a question