Post three of your “margin notes” from your reading of the chapter to your blog. Why did you make the comment you made in the margin? What did you find confusing, useful, or important about the passage you commented on? (I know many of you don’t use margin notes or even take notes as you read. For this blog just note down what you found interesting and might like more information on. What caught your eye as you read the chapter? Why did it catch your eye?)
(This is my favorite blog post to read. btw.)
One of my margin notes for this chapter was the stat that from 1977 to 2017 the difference in average earnings of college educated vs no college educated workers has risen so much. The difference in 1977 between college vs no college was 44% – which is a large number. The gap has grown to 76% in 2017, which is even larger. This highlights the human capital concept perfectly, that more education and higher skillset brings in more productivity to firms and deserves higher income.
Unions end up bringing up the wages through collective bargaining, but they tend to decrease labor demand. Since wages are above the equilibrium of the market, this raises the quantity of labor supplied and reduces the quantity of labor demanded. We like to think of unions as providing a way to raise the standard of living of workers being taken advantage of by profit seeking employers and business owners. Which may be true, but it does also reduce labor demand as well.
Competitive markets tend to limit the impact of discrimination on wages. Nondiscriminatory firms will be more profitable. Over the long term, the market will balance out the discriminated workers to enable firms to be more competitive at the lower wage prices and lower demand. Business owners who care only about making money are at an advantage when competing against those who also care about discriminating.
Dude.World 