A lumberjack cutting large trees in rural British Colombia 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 occur when different types of jobs require different levels of skill, effort, and working conditions, leading to differences in pay. In this example, the job of cutting large trees likely requires more physical strength and skill than cutting small Christmas trees, which may explain the difference in wages.

A Lumberjack Cutting Large Trees in Rural British Colombia Being