A lumberjack cutting giant redwoods in California being paid more than is a person cutting and selling small Christmas trees is an example of wage disparity due primarily to compensating differentials.

Question

Quizplus · Accepted Answer

Compensating differentials refer to the higher pay offered to jobs that require more difficult, dangerous, or undesirable working conditions. Cutting giant redwoods is more difficult and dangerous than cutting small Christmas trees, and therefore, the lumberjack is likely to be paid more as a form of compensating differential.

A Lumberjack Cutting Giant Redwoods in California Being Paid More