1. GAMAN RATHOD
SHUBHAM GUPTA
Wage differential

2. Wage differential
The committee on fair wages recommended that wage differentials should be
established on the basis of certain considerations:
 The degree of skill
 The strain of work
 The experience involved
 The training required
 The responsibility undertaken
 The mental and physical requirement
 The disagreeableness of the task
 Hazards
 Fatigue involved

3. Ordinarily wage differentials may arise out of the following factors:
 Ignorance on the part of employers and employees as to the prevailing
wage rates
 Due to different systems of payment
 Due to payment of overtimes, vacations, statutory holidays, SL,
 Relative bargaining powers of employers and employees
 Due to different systems of payment

4. The nature and extent of wage differentials are conditioned by a set of
factors such as:
 The condition prevailing in the market
 The extent of unionization
 Relative bargaining power of employer and employee
 The rate of growth of productivity
 The extent of authoritarian regulations and the centralization of
decision making
 The customs and traditions
 The general economic, industrial and economic conditions in the
country.
 Prevailing rates of wages
 Capacity of an industry to pay

5. Common types of wage differentials:
Occupational, skill, interplant, inter industry, regional/geographical and gender
differential.
Occupational wage differentials:
Diff in tech advancement, managerial efficiency, structure of product market,
financial capacity, availability of raw materials and power , transport
facilities are some of the significant variables that influence interfirm wage
rates.
 Skilled semiskilled and unskilled
 Occupations requiring greater skill, experience, and efforts are paid higher
 Diff in blue collar and white collar