4.7 Discrimination in the labour market

Wage differentials

The differences in pay that exist between different workers, stemming from variations in skill level, experience and industry

Wage discrimination

The differences in pay of workers that are doing the same or equivalent work because of a protected characteristic

Examples of protected characteristics

Age, disability, gender, pregnancy, race, religion, sexual orientation

The conditions necessary for wage discrimination

Imperfect competition → wage setting power

Employers require information on the minimum amount each worker is willing to accept

No leakages → workers should not have information on the pay of workers in other segments

Equal pay act

ensures equal pay for men and women performing the same or equivalent work

Now is encompassed in the equality act