2.5: Wages and Education

The Human Capital Argument-

Education actually makes you more productive

The Signaling Argument-

Getting a diploma “signals” to potential employers that you are more likely to be a valuable employee.

Ability Bias Argument-

Students that attend college are already more intelligent and hard working than non-college bound students.

Is increasing minimum wage good or bad?

GOOD IDEA-

We don’t want poor people living in the street, so we should make sure they have enough to live on.

BAD IDEA-

Increasing minimum wage too much leads to more unemployment and higher prices.

What are other reasons for differences in wage?

Labor Market Imperfections-

Insufficient/misleading job information-

Geographical Immobility-

Unions

Wage Discrimination-

Soft Skills

Skills needed in ALL jobs, regardless of field or specialty

Soft Skills Ex:

Work Ethic

Teamwork and Communication

Time Management and Punctuality

Good Character