Wage Discrimination: Measurement, Theories, and Policies

Running Head: WAGE DISCRIMINATION
WAGE DISCRIMINATION
Name
Professor
Institution
Course
Date

WAGE DISCRIMINATION 2
Introduction
This discussion will involve wage discrimination, how it is measured, the theories
involved in wage discrimination and policies applied to counter wage discrimination. Wage
discrimination happens when similar workers get different wages making consideration of race,
sex, ethnicity, their sexual alignment or some other attributed features that are not directly allied
to the output of workers. The workers that are victims of lower wages may earn lower incomes in
a given job may acquire lower wages in a given task, be allocated to low wage jobs in distinct
firms or even be generally being employed in low wage paying firms. It is important for
employees to avoid wage discrimination since in most occasions; wage discrimination will yield
less productivity for some workers and also bring about misunderstanding and loss of the feeling
of belonging for the workers who are being discriminated.
The public perceives equal payment as an issue that affects women only. However, a
close look at data on unemployment shows that wage discrimination is not an issue affecting
women only but there are also charges filed by men for wage discrimination (Blinder, 2015).
The question of whether it is illegal to pay workers different salaries in the same rank depends
with the reason for the difference in payments. Employers are given permission to agree to make
different payment rates for the employees doing the same kind of job as long as the employers do
not breach the law of contract. In case of price discrimination, the employees are advised to sue
the employers under Title VII which prohibits discrimination under any basis (Roemer, 2013). In
a case whereby the employee is not protected by the employment contracts; there is no set
amount that an employer is supposed to pay them. Employers, however, are not allowed to
reduce the wages to a level that is lower than the standards set by the particular state.
Measuring Wage discrimination
Worker productivity is in most cases not measured directly and therefore it is not easy to
tell whether workers that are equally productive earn the same amount of income based on the
group membership (Neuman & Oaxaca, 2014). Instead, we pose a question of whether similar
workers having different sex, race, gender, and ethnicity get different pay. The difficulty
encountered in this approach is the dimensions in which given workers are supposed to be
similar (Neumark, 2014). If for instance we compare undergraduate (for biology for example)

WAGE DISCRIMINATION 3
workers both male and female and discover that the women workers receive relatively lower
wages. If we also considered those workers who are teachers in this group and found out that
both genders are paid equally, we might, therefore, make an inference that many women would
prefer to be teachers may be because they want to be with their children after the lessons are over
or even during the vacations (Stanley & Jarrell, 2015). Both men and women who possess these
characteristics end up accepting lower wages and hence, in this case, there is no discrimination in
wages. Women might, however, face wage discrimination in other careers apart from teaching
and hence those who do not do teaching might face job discrimination or might be lucky to get
high paying jobs and in this matter, we then miss discrimination in wages when we compare men
and women who are in the same occupation (Neumark, 2014).
The approximations on the level of wage discrimination and its existence are critically
depended on the factors that human beings control. There exist large earning differentials
between men and women of different colors taking no other factor into account (Gardeazabal &
Ugidos, 2017). Studies based on the skin shade revealed that the darker Hispanic and African
Americans are paid less than the Hispanics and Americans and the Africans that possess lighter
complexions. Much of the difference between the Americans and Africans is controlled by the
cognitive test score and this happens in high school. However, a significant difference reappears
in a situation that we control for years of learning. The differences in the earnings of black and
white women who are employed are modest but the differences are high in a situation where we
consider the earnings of those who are not working (Oaxaca & Ransom, 2015). For instance,
much of the Hispanic differentials in wage can be explained by education and the existence of
basic knowledge of English in the workers. Career interruptions can also be used to give
explanations concerning the differences that exist in the wage differentials for both male and
female.
Theory in Wage Discrimination
The Human Capital Theory of Wage Discrimination
According to this model, every person is entitled to some form of capital. Human capital
is determined in terms of abilities and the skills that people acquire through training and
education. The skills are the basis through which these people earn income. Traditionally,