4. Discrimination Aa Aa Two economists agree that discrimination against certain
ID: 1116368 • Letter: 4
Question
4. Discrimination Aa Aa Two economists agree that discrimination against certain workers unfairly leads to lower wages for the disfavored group. Economist A argues that government intervention is most likely necessary to eliminate this unfair treatment, whereas Economist B argues that the best solution to the unfair treatment is to let the market work to eliminate it on its own Economist A is most likely to be correct when labor and product markets are highly competitive and the lower wages of the disfavored group result from O Discrimination by consumers Statistical discrimination O Discrimination by employersExplanation / Answer
Whenever there is a discriminancy in the wages paid to the workers then there can be various causes behind this discrimination. Here two different policies have been given by two different economist. Now if the argument of economist A is likely to be correct i.e the government intervention will eliminate the unfair treatment. Now if government intervention be the right policy when there is highly competitive labour and product market then discrimination should be resulted from Discrimination by employers.
Now why the other two option not be the cause. Because if ther is statistical discrimination then Govt. has no role to eliminate it. Because it is a statisticaldata showing the discrimination. Similarly it is true for the first option i.e discrimination by consumers. If consumer has a role to discriminate the wages paid to the labour then govt can not do much more thing.
If the discrimination comes from employers then government can play a role by taking some policies on that isssue. It can create wage related rules and regulation and employers have to obey that rules and regulation. Then this unfair discrimination can eliminate.
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