1. Learning Objective:
Today I will be able to explain why wages differ across labor markets by completing an evidence guide about what determines wages.
Agenda:
Learning Objective
Ch. 9.2 Evidence Guide
Lecture: Ch. 9.2 Wage Determination
Exit Slip

2. Discrimination in the Workforce
What kinds of discrimination were mention?
Why do people discriminate in the workforce?
Explain how does discrimination determine who makes more money or has better jobs?
Are there any other types of discriminations besides the ones mentioned in the video?
Youtube—Buzzfeed: Gender
Jose or Joe

3. Title Notes: Ch. 9.2 Wage Determination
Workers sorted into 22 occupations
Highest wage are for managements at $34 per hour
Lowest wage for food workers $10 per hour
Wage Determinants
Training, Education, & Age, Experience

4. 1. True or False
The more costly the training is for a certain job the less pay those who get that training get paid because that means they overcharge for their work.
Page # Paragraph #: 2 Evidence Sentence: “Costly training reduces market supply because fewer individuals are willing to undergo…. Reduced supply and increased demand both increases the market wage.”

5. 2. True or False
The more educated and the older an individual is, the higher the income for that individual will be.
Page # __ Paragraph #:_3__ Evidence Sentence: “Notice that the pay increase with age is greater for more-educated workers.”

6. 2. Difference in ability Those who are more productive/able earn more
Ex. Kevin Garnet of Minnesota as paid $25.2 million in 2002…. 5 TIMES MORE than the lowest paid player in the NBA.

7. 3. Difference in Risk 3. True or False
Jobs with higher risk of injury and danger, like coal mining, are paid very little.
Page # __269____ Paragraph #:__2,3___ Evidence Sentence:
“Jobs with a higher probability of injury or death, such s coal mining…. Pay more than safe jobs.”
3. Difference in Risk
Danger= more pay

8. Page # __269___ Paragraph #:___4__ Evidence Sentence:
4. True or False
People have the incentive to work for less as long as they do not need to move.
Page # __269___ Paragraph #:___4__ Evidence Sentence:
“…strong incentive to supply their resources [labor] ….where they earn most.”
4. Geographic Difference
Go where they pay more

9. 5. Job Discrimination 5. True or False
Some people earn higher wages because of discrimination in the job market based on race, ethnicity, or gender.
Page # ___269___ Paragraph #:___5__ Evidence Sentence:
“.. People earn lower wages because of discrimination…”
5. Job Discrimination
Minorities earn less (women, Latinos, Blacks, etc.)

10. 6. True or False
Job discrimination can happen when the applicant lacks training. The discrimination may not come from the employer, but from the training such as schools, union apprenticeship program, etc.
Page # ___269__ Paragraph #: ____5,6__ Evidence Sentence:
“An Employer may fail to hire a minority job applicant because the applicant lacks training.”

11. 7. True or False
Women earn a lot more than men, by a significant amount.
Page # _269__ Paragraph #: __8__ Evidence Sentence:
“By 2002, females earned 77.5 % of male pay”

12. Page # _269__ Paragraph #: ___9___ Evidence Sentence:
8. True or False
Workers represented by labor unions earn less than average compared to other workers.
Page # _269__ Paragraph #: ___9___ Evidence Sentence:
“…Workers represented by labor unions earn more….”
6. Union membership
Union protects wages

13. Page # 271__ Paragraph #: _1__ Evidence Sentence:
9. True or False
When the minimum wage is increased employers react by substituting more-qualified minimum wage workers, such as high school graduates, for less-qualified workers, such as high school drop outs.
Page # 271__ Paragraph #: _1__ Evidence Sentence:
“substitutuing more-qualified minimum wage workers…. For less qualified”
Minimum wage
Min. amount an employer pays for an hr.

14. Increasing min. wage may encourage dropping out.
10. True or False
The unemployment rate is the highest for high school dropouts.
Page #:_271_ Paragraph #: _4_ Evidence Sentence: “The unemployment rate is highest for high school dropouts.”
Increasing min. wage may encourage dropping out.

15. When min. wage increases employers reacts:
Substitute part time for full time
Substitute qualified workers for less qualified
Adjust, reduce employer cost or increase productivity
Critics
Setting min. wage above equilibrium wage causes employers to reduces jobs.

16. Exit Slip
The minimum wage will increase in about the next 5 years from $9 to $15 per hour. Where do you think you will be working by then? And what effects do you think the increase of the minimum wage will have?