Question on MRP
If you were to describe in logical steps how MRP leads to wage differentials, how would you do it?
All I can put into words is if a workers MRP is higher, they will bring in more revenue for the firm.
How would you expand on this and link it wage differentials?
All I can put into words is if a workers MRP is higher, they will bring in more revenue for the firm.
How would you expand on this and link it wage differentials?
so you can say that MRP naturally varies
e.g. a lawyer has a high MRP due to the skill involved- they did training, education, sacrificed earlier wage-earning in order to study, they have stress at home etc etc.
Then state that this is different to a cleaner who doesnt have as many qualifications, no stress to carry etc.
Therefore, MRP has led to a wage differential as the lawyer and cleaner are paid differently as the lawyer generates more revenue for the firm so the money value of their work is higher. A cleaner makes no additional revenue and can be easily replaced.
e.g. a lawyer has a high MRP due to the skill involved- they did training, education, sacrificed earlier wage-earning in order to study, they have stress at home etc etc.
Then state that this is different to a cleaner who doesnt have as many qualifications, no stress to carry etc.
Therefore, MRP has led to a wage differential as the lawyer and cleaner are paid differently as the lawyer generates more revenue for the firm so the money value of their work is higher. A cleaner makes no additional revenue and can be easily replaced.
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