Question

Analyze the factors that affect wages from a quantitative economic perspective (data, formula, modeling, analysis) at least 300 words

Answer 1

Wages are deeply affected in variety of reasons like state and federal laws, Organisations profitability, sector wise health, geopolitical risks, national economic progress, labor union issues, location constraint,nature of job and skills required, expected productivity,etc.

Some other external factors affecting wages in US specific case are China Us Trade War, Low Exporting Regime, Immigration from Canada and Mexico, Lower Corporate Taxes, Maximum impact from Labor Laws, State and Federal Government Budget, Fiscal policy,etc.

Wages fluctuate more or less depending on how the laws have been prescribed in state which is biggest crucial critical factor and hence various states adopt various laws for example in Texas the minimum wage has been set different from other states who have accepted changes in minimum wages. Texas has seen high inflation and hence being reluctant to keep wage rate same and hence it is the economic conditions which largely affect wage rate.

Similarly geopolitical risks like Brexit have made wages plunge in 2018 due to widescale immigration and nationality issues .

Wages are affected by Series of factors and assigning weights to factors can give more deeper insight as to which factor have maximum implications and how can they be resolved.

There has been big difference in wages between men and women due to biases like men are more productive, highly skilled and have longer willingness to work with Organisation making men more favoured and women vulnerable to higher wages.

Secondly the empirical evidence as per research conducted by Timewise shows following reasons for gender pay gap:

More men held senior management positions than women

Due to maternity, the productivity declines and hence brings stickiness in appriasals

Women choose to work in low paid roles and less reluctant to change.