What does the term "compensating differential" refer to
A)the fact that workers that do similar work should be paid the same wage
B)the fact that some workers live farther from their jobs than do other workers
C)a wage difference that is based on monetary characteristics
D)a wage difference that is provided to offset the nonmonetary characteristics of different jobs

Question

Quizplus · Accepted Answer

Compensating differential refers to the wage difference that is provided to offset the nonmonetary characteristics of different jobs. For example, a job that is physically demanding, risky or requires working in an unpleasant environment may require a higher wage to compensate workers for taking on such job-related drawbacks. It is not about paying workers the same wage or compensating for differences in commuting distance.

What Does the Term "Compensating Differential" Refer to