Politicians often point to wage differentials as evidence of labor-market discrimination against ethnic minorities and women; however, economists argue against this approach because people differ in the amount of human capital they have and the kinds of work they are willing and able to do.

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Economists argue that wage differentials can be attributed to differences in human capital (such as education, skills, and experience) and job preferences rather than solely to labor-market discrimination. This perspective suggests that not all wage disparities are indicative of discrimination, as they may also reflect variations in individual qualifications and job choices.

Politicians Often Point to Wage Differentials as Evidence of Labor-Market