Questions On The Hourly Wage Essay

754 Words Jan 4th, 2016 4 Pages
This report is to adress relations of stated determinants to the hourly wage. This report will discuss hourly wage in general. Additionally, literature overview and past researches will be evaluated accordingly to the research. Three hypotheses and discourse upon them will be made and connectedly to the research analysed.Finally, a conclusion would be made to discuss findings and conclude research.

1. Introduction

' 'Hourly wage is an amount of money paid each hour to compensate an employee for the amount of time he/she spends working. Wages are paid for both skilled and unskilled labor. For example, one may pay an employee $8 per hour for working at a fast food restaurant or $45 per hour for highly trained work at a car factory. ' ' (Farlex Financial Dictionary, 2009)
There are major wage differences between workers. Wage is determined by worker 's input to productivity. By theory of equilibrium every worker should be paid according to his work and there should not be wage differences among a group of workers with the equal productivity. However every worker and every job they have is different, this results in different wage. (Mankiw & Taylor, 2014, p. 367)
Mankiw and Taylor (2014, p. 368 & 369) discussed that human capital (investment in people) is very important factor in determining wages. Human capital is as any other capital an expenditure which raises productivity in the future. One of the ways to invest in human capital is an education. North american and…

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