Politicians often point to wage differentials as evidence of labor market discrimination against ethnic minorities and women. Economists, however, argue against this approach because
A)they don't believe the wage differential really exists.
B)they can't agree on a definition of the term "discrimination."
C)they believe compensating differentials account for all wage differences.
D)different people may have different wages for reasons unrelated to discrimination.

Question

Quizplus · Accepted Answer

Economists believe that different people may have different wages for reasons unrelated to discrimination. These reasons include differences in education, experience, job responsibilities and performance. Economists also point to the concept of compensating differentials, which refer to differences in pay for jobs that require different levels of unpleasantness or risk. For example, a job that requires a person to work in hazardous conditions might pay more than a job that doesn't, and this differential in pay would not be discrimination.

Politicians Often Point to Wage Differentials as Evidence of Labor