Unit 6 Assignment Example | Topics and Well Written Essays - 500 words

Unit 6 - Assignment ExampleImbalances in wage structure arise when on that point is a deviation from the optimum wage set by the self-regulating system in the economy. I feel there are imbalances in the wage structure in our economy. The labor market lie in of different types of workers differing from one another in a number of ways with the job differing in characteristics some(prenominal) in terms of wage and in terms of other nonmonetary associates (Mankiw, 2011).In order to protect employees from maturation by their employers, the government sets a minimum wage limit. This has been of help raising the wages of the less handy compared to what they would drive home earned in a labor market that is unregulated. However, despite this, the wages of some workers have been set above the equilibrium level arising to disequilibrium in the labor market (Mankiw, 2011). We can also attribute this to compensating differentials which refers to the difference in wages which arises from ot her nonmonetary characteristics of various types of jobs which is quite prevalent in our economy. An example would be employees with similar qualifications but since one works during a night shift earns more. Employees deployed to work in rigour conditions may be compensated more compared to employees with similar qualifications but working under friendly environments. serviceman capital is the accumulation of investment in people with the most explication of it being education. The perspective of demand and preparation postulates that there exists a correlation between high wages and the level of education. Additionally, firms demanding for labor tend to be more willing to pay more for the highly educated employees since they tend to have higher peripheral productivity due to their proficiency (Mankiw, 2011). On the other hand, the suppliers of labor tend to also be more willing to pay the costs of becoming educated only if there is a reward for that. and then the difference i n wages between the highly educated