Politicians often point to wage differentials as evidence of labour market discrimination against ethnic minorities and women. Nonetheless, economists argue that this is not an appropriate way to identify discrimination because:

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Economists argue that wage differentials are not an appropriate way to identify discrimination because even in a labour market free of discrimination, different people will have different wages based on factors such as education, skills, experience, and productivity. This means that simply observing wage differentials does not necessarily prove the existence of discrimination.

Politicians Often Point to Wage Differentials as Evidence of Labour