According to the Bureau of Labor Statistics in 2013, the unemployment rate for A

Question

According to the Bureau of Labor Statistics in 2013, the unemployment rate for African American men was 13.1% while 6.5% for White men. At the same time, African American men earned median usual weekly earnings of $1,002 and $1,359 for White men. (20 points) How would neoclassical economists explain these differences? Use marginal productivity and at least one other idea from this perspective to explain these difference. How would a political economist critique this approach to understanding the work experiences of minorities? Offer at least two specific concepts that would be raised in their alternative approach.

Explanation / Answer

The neoclassicals can explain this problem in the following ways.

a. Difference in the marginal productivity- Neoclassicals will argue that white men have more marginal producitivity than african americans and hence the former are paid more.

b. There is a possibility that more white men are in union and therefore they can negotiate for high wages and earn more.

a political economist critique will argue that this difference in wages is due to the the dicrimination against african americans in the US. There is a lot of evidence that suggest that africans americans are still discriminated against.

b. Also, there can also be a possible scenario where the employers feel that the qualities possesed by whote men for jobs are desirable and better than those possessed by african americans.

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