Every industry has its own way of structuring the payments for their employees. Wage differentials are a common occurrence across all industries due to various economic reasons. There are substantial differences in compensation experienced across industries despite an almost similar measurable quantity of work. The average wage for general managers for bowling alleys is from $17.40 per hour while the same title in the chemicals industry pays from $45 an hour. There is a significant difference in the take-home-pay for employees in the two sectors (“Inter-industry wage differentials”, 2000). 

            Wage differentials will be brought about by the job conditions of the industry where individuals operate. A manager of a bowling alley and another of a petroleum firm will not receive similar wages. The latter will be paid more than the former despite the fact that they are both managers. The petroleum industry is bigger and more competitive compared to bowling alleys and hence managers are likely to face more challenges. The bowling alley manager is likely to deal with matters of a lesser scope compared to the chemical industry manager. The level of negotiations, job requirements, responsibility among others, weighs heavily on the chemical plant manager.

            The amount of skill and effort that goes into a job will also determine the wages across industries. Skilled labor is rare and hence it is an expensive factor of production. Therefore, more skill will relate into a higher compensation. For example, washing a car is not similar to washing a plane since the latter requires greater skill, effort, and the use of equipment. The two jobs are essentially similar but the plane washers will receive higher wages since they need to incorporate equipment and advanced skills.

            There are many other factors that cause wage differentials across industries where individuals offer the same quality of labor. Occupational differences are therefore not the only factors that cause difference of wages. Similarly skilled people will receive different wages depending on the industry they operate.

References

Inter-industry wage differentials: patterns and possible sources. (2000, February). Retrieved from https://www.bls.gov/mlr/2000/02/art4full.pdf