Wage rates are not same in all occupations. They differ from occupation to occupation and from person to person in the same occupations and from place to place. The following are the causes for differences in wages between occupation to occupation.
1. Training time and cost of training : Occupation like engineering, medicine etc. require costly education and training. As such, these jobs should have high wages. Otherwise people will not be willing to take up such occupations. On the other hand, in the Occupations where the cost of training is less the wages will be low.
2. Differences in efficiency: All workers do not have similar efficiency. Some workers may be more efficient and some others may be inefficient. Generally the efficient people will be paid higher wages than inefficient people.
3. Dangerous occupations : Occupations like mine workers, drivers, military employees etc. are dangerous. Generally people will not be willing to join such jobs. Hence high wages have to be paid to attract people into such occupations.
4. Regularity of employment : In temporary jobs higher wages have to be paid to attract people. If the job is regular and permanent, people will be willing to join in such jobs even if the wages are relatively low.
5. Agreeableness of occupation: Generally in agreeable jobs lower wages will be offered than disagreeable jobs. To attract the people into the disagreeable occupations, higher wages will be offered.
6. Future prospects: If there are future promotions in a job people may accept low wages in initial stages. On the other hand, the wages will be high in the jobs where there is no scope for promotions.
7. Social prestige : Certain jobs carry social prestige, for example, teaching and medicine, Many people like to join such professions. The supply of men in such occupations is more than the demand. As a result, the wages are low. The work of mechanic is looked down upon by the society but the mechanic earns much more than a teacher.
8. Inborn skills : Some professions like actors, singers etc. require some personal inborn qualities. Generally very few people possess such qualities. In such professions, the supply of men will be less than the demand for them. Hence, the earnings are high in such occupations.
9. Risk and responsibility: If the job is risky, a person must be paid more than another whose job is free from risk. Some jobs require reliable and responsible persons. For example, a Bank Officer is paid more than a clerk as his work is more responsible.
10. Disparities in the cost of living: Due to the differences in the cost of living, wage differs from place to place. The wages will be high in the places where the cost of living is high and vice-versa.
11. Trade Unions: In some jobs, the trade unions are very strong. They will be able to get higher wages than other jobs.
12. Immobility of labour: Due to the existence of non-competing groups supply of some labourers is limited. Hence they get relatively higher wages.
Thus, there are several reasons for the differences in wages from occupation to occupation. The main reason is in some jobs the supply of labour is less than the demand for them. While in some other jobs the supply is more than the demand. In the jobs where the supply of labour is less than the demand the wages will be high. On the other hand, in the jobs where the supply of labour is more than the demand, the wages will be relatively lower.
