With particular reference to gender inequalities, examine the reasons for inequality in the labour market.

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Tara Flannery

SPO551

Gerard Strange

With particular reference to gender inequalities, examine the reasons for inequality in the labour market.

When looking at inequalities in the labour market it is necessary to understand the key features of a perfectly competitive market. If these features or assumptions were to hold true in the real world market there would be no inequality at all. However in reality the labour has a very disproportionate wage in relation to men and women in the same occupation. The segmentation in the labour market also causes some unbalance. On one hand there is the Primary Sector where the highly work, in an unionised industry. On the other hand is the Secondary Sector in which workers are low skilled, poorly regulated and non-unionised. This is where issues of gender inequality begin to arise, reasons for inequality range from the social role of a woman to blatant discrimination. Though much legislation has been introduced, such as the 1984 Amendment to the Equal Pay Act 1975, many employers go out of their way to avoid giving female workers equal pay. The same kind of gender inequality can be found in post Communist Russia, although discrimination exists at a far greater extent. A Russian Labour Minister asked “Why should we employ women when men are unemployed . . . I don’t think women should work while men are doing nothing.” (Gennady Melikyan, The Independent 1993) Sadly, many men hold the view stated by this politician in the current labour market, however they are not as keen to voice their opinion.

Economists’ today rely upon ‘models’ to make simplifying assumptions relating to the behaviour and structure of the economic agents. It is assumed that three criteria must be in place for a perfectly competitive market to operate. Firstly, jobs must be equally attractive to all people. At the moment however, incentives such as higher wages are supplied in the more unattractive jobs. Secondly all individuals must posses ‘perfect knowledge and perfect information’ concerning prices and price changes. This assumption implies that everyone should have the knowledge to do all occupations and has the information on supply and demand in relation to these jobs. As a result there would be no scarcity of labour. In reality, specific occupations require a higher wage as they entail long period of training and a great deal of skill, which a limited amount of people can carry out. Thirdly, perfect mobility is assumed to provide equality in the labour market. In theory this would result in everyone being capable of acting on available information and transferring jobs without difficulty. However all three assumptions are only that and do not hold true in the real world market. As a result inequalities occur. In fact there are many inequalities between men and women in the UK labour market.

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The first notable aspect of gender inequality in relation to wages is that there are considerable income differences between men and women, working in the same occupations. It is believed that in a ‘capitalist society the pay that people receive is a measure of the value of their labour.’ (Marsh et al, 2000). However, upon looking at Figure 1 it is obvious that women are receiving less pay for doing the same job as their male counterparts. The New Earnings Survey 1997 identified that female full time workers received only 80% f the average hourly earnings of a full time ...

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