Question

My teacher says this doesn't sound right and it needs to sound more scholarly. Can you please help me reword it?

Wages are determined in a labor market. the labor supply curve clarifies workers in a variety of occupations and hourly rates. When a person supplies labor, they become the seller, when a person buys labor, they become the buyer. That’s when wages negotiation insures. Based on how much a seller wants per hour. The buyer can easily hire other people for much less, but the seller can get paid somewhere else for what he is worth. That’s where negotiation and agreement come in voluntary exchange. Wages offered must cover his opportunity cost, the value of his lost free time and the money he could making doing something else. Derived demand when a company is booming the company will want to hire more workers. Engineers are high in demand, because they produce the products people want and their supply is limited because the training for these jobs is difficult. Social workers worker’s and historians are not paid as much, because demand is relatively low, and supply is relatively high.There are several reasons why. Wages in a labor market don’t end up at the competitive equilibrium sometimes workers get paid less not because they have different skill, levels but because of their race, ethnic, origin, sex, or other characteristics this is called wage discrimination.

Answer 1

Equilibrium level of wage is determined as the demand and supply of labor clears in the labor market. The labor supply (sellers) face an upward sloping curve while the labor demand (buyers) faces a downward sloping curve with regards to wages. Wage negotiation will ensure that the labor suppliers are able to cover their opportunity cost of supplying labor which includes both the income they would earn by working elsewhere or the value of their leisure. For instance, engineers are usually paid high wages as the demand for engineers usually exceeds their supply in the labor market because of the skillset they posses. Thus, equilibrium wages reflect the value added by a worker to the firm. Similarly, historians are usually paid lesser wages as their skill set is not suitable to a firm's need and thus their demand will exceed the supply. Having said so, the equilibrium wages are not always a true reflection of skillset or value addition. There are cases of voluntary discrimination on grounds of religion, gender, race, ethnicity etc. This is known as wage discrimination