Question

Wyn Lee discovered that her friend and co-worker, John, is being paid a higher hourly wage than she receives despite the fact that they have similar qualifications and perform exactly the same type of job. It appears that their firm may be:

Answer 1

Wyn Lee needs to evaluate whether the wage disparity between her and John implies gender or racial discrimination, and if so, she must prove the inequity based on similar qualifications and job roles. The efficiency wage theory explains that sometimes higher wages are a strategic choice by employers.

Step-by-step explanation:

When Wyn Lee discovers that her colleague John is being paid a higher hourly wage for the same job despite similar qualifications, it raises concerns about potential wage discrimination. In the workforce, wages are generally set based on supply and demand of skills, with employees having rare and needed skills tending to earn more.

However, if disparities exist among employees with similar job functions, education, and skills, it could indicate a violation of anti-discrimination laws concerning gender or racial discrimination.

The efficiency wage theory also plays a role in compensation strategies, suggesting that higher pay might be a strategic decision by employers to ensure productivity and reduce turnover costs, rather than an act of discrimination.

Nevertheless, to address potential discrimination, one must demonstrate that the wage differences can't be attributed to factors like productivity, but instead to prohibited factors such as gender or race.