Final answer:
Wages are primarily governed by supply and demand in the labor market, although government regulations and policies can also have a significant impact on both the demand for and supply of labor, thereby affecting wage levels.
Step-by-step explanation:
Wages and other factors of production are largely governed by supply and demand. While government regulation, labor laws, and social ceilings like the glass ceiling do have impacts, it is the interplay between the supply of labor and the demand for labor that fundamentally sets wages.
On the demand side, government regulations can impact the ease with which businesses are established and expanded. These regulations include bureaucratic procedures, permits, fees, product restrictions, and zoning laws. On the supply side, government policies such as support for training or setting qualifications for jobs can affect the number of qualified workers willing to work at a given wage.
Subsidies for training, unemployment benefits, maternity leave, child care benefits, and welfare policies can all shift the supply curve of labor. These policies can either make it more attractive to work or discourage work, which in turn influences wage levels.