A lumberjack cutting giant redwoods in California being paid more than 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 wages paid to workers to compensate for the undesirable aspects of a job, such as danger or difficulty. Cutting giant redwoods is more dangerous and requires more skill than cutting small Christmas trees, justifying higher pay.

A Lumberjack Cutting Giant Redwoods in California Being Paid More