Discuss the difference in wages earned in a competitive labor market with wages in a monopsony. Discuss why wages are not the same in all labor markets and for all workers in given labor market.
Do you agree with this concept?
After your initial post, respond to at least two of your classmates’ posts. Your initial post should be at least six complete sentences and your reply to your classmates’ posts should be at least three complete sentences.this is reply of my classmates;Competitive Labor Market wages – This market assumes that many workers compete for jobs, and many employers compete for workers; thus, everyone is a price taker on both sides of the market.
The equilibrium wage rate equals the marginal revenue product of labor.
In the special case in which all of the employers are price takers in the market where they sell their output as well as in the market where they purchase inputs, the equilibrium wage rate also equals the value of marginal product. Monopsony wages – This is an extreme. case in which the employer accounts for 100% of the demand in a resource market. Wage is not given in a Monopsony labor market. Instead, the employer faces a range of wage-quantity combinations that lie along a positively sloped labor supply curve. Marginal resource cost is greater than the price of the input.
There are multiple reasons why wages differ within the labor markets and for all workers. Firstly, we can look at the Human Capital Theory. This states that the earnings of each occupations that requires special training must be high enough to make up for the opportunity cost of getting the training. Some examples would be, college, trade schools, on the job training, course that certify you for specific occupations, ect. Another example of the differentiating of wages between labor markets would be the Efficiency Wage Theory.
This theory explores the opposite of the Human Capital Theory, in which it incentivizes higher wages for high on the job performance. This theory can represent improved morale, lower absenteeism, and decreased job turn over rates. Workers at high paying firms will be less willing to risk their jobs because of poor performance, so they may work to the best of their abilities when unsupervised. I agree with both of these theories because they explore the true characteristics of employees. If wages were the same across the board for all labor markets, there would be less incentive to work harder for a better understanding of learning a occupation.
There would be less doctors, engineers, and economists because they would be getting the same wages as an employee at McDonalds with far less needed education. On the flip side, increasing wages to find harder working employees is a great way to weed out proficiency. This is the quickest way to build a hard working and efficient team to get the job done properly the first time. A competitive labor market is a composite of many firms that are in common with workers. Firms have no power to set wages, the market determines the wages. If a firm deviates from this wage, it either pays less and losses workers or pay more, sustain losses, and exits the market.A monopsony is a situation in which there is only a single buyer in the market, more generally, any situation in which a firm is a price searcher in a market in which it is a buyer. There are many reason why wages differ within the labor markets, but some have their own restrictions.
I remembered visiting the Google Headquarters and seeing the benefits of all the workers there. The workers had full access to their gym, daycares, library, they even got free food. Then I met the workers there, the first one I met as a manager of the software department, and the other was an employee of the arts division of Google. They both get the full benefits of working there, but they also both get paid differently. I agree with this concepts as it shows me the value of different jobs. If wages were equal among ourselves, why bother to do more intensive jobs like being a ceo of a company than being a cashier were you also get paid the same. With the same wages, it would discourage people to do more important jobs like being a doctor, engineer, etc..
