Final answer:
The implication of the O-Ring Model is that workers in high-skill firms earn higher wages than those in low-skill firms, supported by the insider-outsider labor force model and the demand and supply model related to technological advances.
Step-by-step explanation:
One implication of the O-Ring Model is that workers performing the same task earn higher wages in a high-skill firm than in a low-skill firm. This phenomenon aligns with the insider-outsider model of the labor force that emphasizes the importance of insiders within a firm. Insiders, or existing employees, are crucial for smooth operations and productivity, while reductions in wages can alienate them and harm the firm’s outcomes.
The demand and supply model also contributes to understanding this dynamic, predicting that advances in technology increase the pay for high-skill workers and decrease it for low-skill workers. This has contributed to the widening wage gap from the 1970s through the mid-2000s, and this gap has persisted, with college graduates earning significantly more than high school graduates with similar professional experience.