Wage differential

The committee on fair wages recommended that wage differentials should be established on the basis of certain considerations: The degree of skill The strain of work The experience involved The training required The responsibility undertaken The mental and physical requirement The disagreeableness of the task Hazards Fatigue involved

List of factors to explain wage diversity: The wide diff in the earning of employers The personnel policy of employers Imperfections of the labor market the relative bargaining strength of individual employers and local unions The value of labor to an individual employer The proportion of total cost labor costs represented by labor cost Market conditions of the employers product. Variation in individual performance Fringe benefits-growing importance Hazards connected to a job

Ordinarily wage differentials may arise out of the following factors: Ignorance on the part of employers and employees as to the prevailing wage rates Due to different systems of payment Due to payment of overtimes, vacations, statutory holidays, SL, Relative bargaining powers of employers and employees Due to different systems of payment

The nature and extent of wage differentials are conditioned by a set of factors such as:
The condition prevailing in the market The extent of unionization Relative bargaining power of employer and employee The rate of growth of productivity The extent of authoritarian regulations and the centralization of decision making The customs and traditions The general economic, industrial and economic conditions in the country. Prevailing rates of wages Capacity of an industry to pay

Common types of wage differentials: Occupational, skill, interplant, inter industry, regional/geographical and gender differential. Occupational wage differentials: Diff in tech advancement, managerial efficiency, structure of product market, financial capacity, availability of raw materials and power , transport facilities are some of the significant variables that influence interfirm wage rates. Skilled semiskilled and unskilled Occupations requiring greater skill, experience, and efforts are paid higher Diff in blue collar and white collar

 Skill differential. Inter industry :Industries with large no of skilled workers pay high. Developing and expanding capital intensive industries pay higher than other labor intensive industries. Regional wage diff: most imp factors in determining regional wage diff are capacity to pay, product market(monopolistic or competitive) besides these factors: Abundance of natural resources, diff in labor productivity, diff in cost of living, rate of capital formation, unionization, urban or rural area, labor supply, social barriers, family ties etc.

 Gender differential Sector differential Standardization of wage scheme