HAT Manifesto Part 1/3 - Rubric Cube - 240804 revision

 

Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.

PART 6 The Economics of Labor Markets

Chapter 19 of 36 Earnings and Discrimination

Section 11 of 17

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Table 2 here

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One source of differences in wages is non-economic discrimination.

This discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by personal characteristics including race, ethnic group, sex, and age.

Non-economic discrimination happens because some people have prejudice against those of certain demographic groups.

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Table 2 shows substantially different wages of groups of workers in the United States

· the median black man is paid 21 percent less than the median white man

· the median black woman is paid 8 percent less than the median white woman

· the median white woman is paid 23 percent less than the median white man

· the median black woman is paid 10 percent less than the median black man

These differentials appear to be evidence employers discriminate against blacks and women.

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People in the labor market differ

· in the amount of human capital they have

· in the kinds of work they are able and willing to do

Consider the role of human capital.

Among male workers, whites are about 75 percent more likely to have a college degree than blacks.

At least some of the wage differential between whites and blacks is because of education level.

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Among white workers men and women are now about equally likely to have a college degree.

But men are about 11 percent more likely to earn a post-graduate degree.

Again, at least some of the wage differential between white men and women is because of education level.

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Historically, public schools in predominantly black areas have been of lower quality, as measured by factors including expenditure and class size than public schools in predominantly white areas.

For many years, schools directed girls away from science and math courses

even though these subjects have greater marketplace value than others.

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Human capital is also acquired through job experience.

Women on average have less job experience than men.

Female labor force participation has increased over the past several decades.

The average female worker today is younger than the average male worker.

Women are more likely to interrupt their careers to raise children.

For both reasons the experience of the average female worker is less than the experience of the average male worker.

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Another source of wage differences is compensating differentials.

Compensating differentials refer to non-wage factors such as clean and safe working conditions.

Jobs with these compensating differentials are preferred by some rather than higher wage jobs with dirty and dangerous conditions.

Men and women often do not choose the same type of work.

Women are more likely to be office workers and men are more likely to be truck drivers.

The wages of office workers and truck drivers depend in part on the working conditions of the job.

Truck driving is more physical and dangerous and often involves much time away from home.

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Differences in human capital among groups of workers may themselves reflect discrimination.

The less rigorous curriculums historically deemed to be favored by and thereby promoted to female students can be considered a discriminatory practice.

The inferior schools historically available to black students may be at least partially attributable to prejudice of members city councils and school boards.