According to most economics textbooks, our wages are determined just like any other price: by supply and demand. People supply their labor, and companies demand it, creating a market for labor. When a lot of people can do the same job, the wage for that job is pushed down. And on the demand side, employers are willing to pay more for an employee that can make them more money.
Unions are associations that allow workers to approach their employers not as individuals, but as a more powerful collective. This power makes unions pretty controversial; some people think they’re necessary for keeping employers in check, but others think they’re too powerful and hurt the economy.
Human capital is a way of describing the value of our skills, talent, and manpower to the economy. ‘Capital’ is usually used to describe some kind of investment that can be used to make money – the term ‘human capital’ sees people as, basically, just that.
The ‘pay gap’ is a term most commonly used to describe the differences in pay between men and women. But it’s not all about gender – we also use ‘pay gap’ when we are talking about differences between other social groups, such as the race, sexuality and ethnicity.
