MRP is when the firm makes additional
revenue for every extra unit of labour they hire.
Ethnicity pay gap is the wage differential
between people who come from a white
background to those who come from a ethnic
minority background. This is due to racial
views that those who come from a white
background create a higher MRP than those
from a minority ethnic background. This
happens despite all ethnic backgrounds having
the same MRP. Employers are irrational and
they demand more workers from a white
background due to their racial belief that
people from a white background generate a higher MRP than those who are from the
minority group. This means that people from a white background will get a higher wage than
the minority ethnic group. This can be shown on the diagram as wage (W) for white ethnic
will be higher at Q than W1 (minority background) at Q1. This shows the wage differential of
the ethnicity pay gap between white background to those who are from a minority ethnic
background in the uk shown between w1 and w2.
revenue for every extra unit of labour they hire.
Ethnicity pay gap is the wage differential
between people who come from a white
background to those who come from a ethnic
minority background. This is due to racial
views that those who come from a white
background create a higher MRP than those
from a minority ethnic background. This
happens despite all ethnic backgrounds having
the same MRP. Employers are irrational and
they demand more workers from a white
background due to their racial belief that
people from a white background generate a higher MRP than those who are from the
minority group. This means that people from a white background will get a higher wage than
the minority ethnic group. This can be shown on the diagram as wage (W) for white ethnic
will be higher at Q than W1 (minority background) at Q1. This shows the wage differential of
the ethnicity pay gap between white background to those who are from a minority ethnic
background in the uk shown between w1 and w2.
